Joyful Frog Digital Incubator (JFDI), said to be Singapore’s first startup accelerator, is closing its accelerator programme and restructuring as it explores models that enable it to function.
According to details in a blog post, the accelerator programme which has been ongoing since 2012, will cease operations. Its last cohort graduated in December 2015.or good according to a blog post by CEO and co-founder Hugh Mason.
This closure will see JFDI shift to a model incorporating partnerships between corporations and startups, which gain more from working together than from competing; startup ventures are strong in delivering products with strong proof-of-concept and market fit, while corporates can aid in scaling.
According to Mason, JFDI’s pre-accelerator programme supported more than 400 startups and 1500+ entrepreneurs from 40+ countries, with $3 million raised and invested in 70 startups through their JFDI Accelerate programme that now sees a portfolio collectively valued in excess of $60 million.
On average, Mason claims that each batch of startups that was selected for acceleration had an acceptance rate of 4 per cent and were valued between $200k to $500k, with 50 per cent going on to close seed investments averaging $500k at valuations ranging from $1.5 million to $3.5 million.
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In the post, Mason observed: “Two years after JFDI, about 15-20% of the teams that secured seed funding look like being really strong winners, with the rest dead or zombies. So overall the hit rate is about 10% of the teams we backed, very typical of an early stage portfolio.”
Since its inception in 2011, JFDI claims to have invested in 70 startup ventures and raised $3 million from various venture capitalists and angel investors. Among them is the investments arm of Singapore’s Infocomm Development Authority (IDA), Infocomm Investments (IIPL). Two of its more notable startup ventures are TradeGecko and Glints, which recently closed a round of funding.
One of the factors in its closure is the inability to sustain itself, with Mason citing longer timelines to an exit and lower valuations relative to the US market, with revenue generation a difficulty due to the availability of free spaces and securing corporate sponsorships. .
This was in addition to factors faced by startups operating in Singapore in the form of a high cost base, scarcity of technical talent and restricted immigration, hampering the growth and scaling of startups regionally.
In parallel to this decision, co-founder Wong Meng Weng has moved to the US to take a up a fellowship at Harvard Law School to develop a new status, Legalese, which utilises software to author legal contracts. This shift comes at at time when the accelerator space in Singapore is perceived as being saturated.