Singapore: Creating a Hot Nesting Ground for the Mystical Birth of Tech Unicorns

Singapore’s push towards smart nation status and continuing emphasis on the fintech sphere has pushed the nation’s startup scene forward considerably, overtaking Silicon Valley as World Number One for global startup talent as of 2017. The country also boasts strong governmental support and a favourable business environment as well as deep access to funding, causing the global business community to focus their favourable attention towards our city-state, rapidly elevating its status as an international startup hub. To top things off, the climate is even further bolstered by having the impressive title of highest number of tech incubators in the region – all providing the vital guidance and facilities necessary for business growth.

When it comes to the entrepreneurial world, ultimate success is commonly pegged to the moniker Unicorn, used to describe a (privately owned) startup that has reached over one Billion dollars in valuation.

Taking this milestone as a global metric for success, we look at homegrown startups that have joined this elite group and also two companies that are poised to join the club over the span of the next several years to keep up with the region’s successes in this area:

Our Three Unicorns leading the way

All three of these businesses have become household names in Singapore, managing to either disrupt or at the very least alter the way we work, live and play.

Offering ride sharing and food delivery service through an app, Grab was valued at US$ 6 billion as of March last year, possibly our most successful locally based tech startup. Grab received a mammoth boost through its ousting of Uber in 2018, with the local ride hailing startup being acknowledged as the highest venture capital funded business in the first quarter of the same year, raising a more than impressive US$ 2.5 billion.

With a landmark acquisition of the business by Alibaba that has seen the company go from strength-to-strength, regional e-commerce giant Lazada joins our very own Unicorn list, valued at around US$ 3.15 Billion as of March 2018. The company has focused on the key markets of Indonesia, Malaysia, Philippines, Singapore, Thailand, and Vietnam, adding considerably to Alibaba’s bottom line over the last few quarters.

The third on the list is Sea LTD (originally Garena), a consumer Internet platform provider based in Asia – founded in 2009 as an online gaming company for people to discover, download and play online games. The company describes itself as one that operates in three industry-leading platforms across digital entertainment, e-commerce and digital financial services. The business managed to successfully list on the New York Stock Exchange with a US$ 4.9 Billion valuation at the time of its IPO.

Two Success Stories in the Making

There have been several projections made on how the Southeast Asian market will see an influx of Unicorns over the span of the next few years, with a Bain & Co.’s report pegging the projected number to ten new introductions into the elite circle. A separate study by PWC found that Singapore most likely to produce the next ‘unicorn’ outside of China and US. We take a look at two candidates and why they deserve to join the club.

On the tip of many pundits’ lips is our very own highly disruptive PropertyGuru, a startup that ticks all the boxes of Unicorn in the making. The company has raised $329.6m (US$240m) YTD (as of Dec 2018) over four funding rounds from seven investors that include VCs, Emtek, and TPG. Its latest series D round amassed $200m, with the real estate startup fully consolidating Vietnam property portal Batdongsan with a user base of over 4 million property seekers.

The company’s executives have been focused on creating a localised experience wherever they expand to, a vital ingredient in its success in an extremely competitive space. They have taken time in each market to truly understand customer pain points and delivered holistic strategies based on these findings. PropertyGuru has also understood the changing face of consumers with such implementations as PropertyGuru Lens, powered by augmented reality, artificial intelligent, geolocational data and the Group’s proprietary data.

Another contender that has great promise of a billion-dollar valuation in the foreseeable future is Carousell, a smartphone and web-based consumer-to-consumer marketplace for buying and selling new and second-hand goods.

When it comes to global expansion, few local startups come close, with the marketplace already successfully spreading their wings to 19 cities across seven countries around the world, raising US$126.8 Million YTD (as of Dec 2018) in funding from seven venture capital firms that include and esteemed list of the likes of Sequoia Capital, 500 Startups and QuestVentures.

The company’s focus on Southeast Asia allows it to tap and extremely vast target audience of potential users, with strategy that has also expanded into Carousell Pro, a subscription-based platform aimed at helping sellers in the property and automotive industry market their listings.
The firm’s marketplace has also tied up with United Overseas Bank to offer digital car-financing solutions for car buyers to transact seamlessly on the platform. The technology flows throughout the startup, with artificial intelligence allowing sellers to upload a photo of an item and then being provided with a suggested title and an appropriate category for it.

With Singapore’s competitive advantage in the startup scene seeing solid support from both the governmental and private levels, it will only be time before more players across varying industries join the race to Unicorn status. What is key is that these startups eye their playing field as a regional one and not only on a local plane – Southeast Asia’s sheer population and growing middle class still has great untapped potential. According to Golden Equator Capital’s Emmanuelle Norchet, the region’s growth will be a form of natural progression for a VC industry that is already seeing startups maturing, strong exit momentum and promising returns.