Deep tech-focused startup accelerator Entrepreneur First, which launched its Asia chapter in the city-state, counts the quality of talent of its cohort founders as a major indicator of its performance.
EF Singapore director Anne Marie Droste told this portal in an email interview: “Our biggest performance indicators are, the quality of the talent that we attract and the companies that we build. The first Singapore cohort consisted of 53 excellent individuals, with over half of them PhDs in technical subjects, leaving jobs at Google, Facebook, JP Morgan, to start startups.”
She adds, “Our talent bar is global, and I think the most surprising insight here is how similar the London and Singapore communities are. Our second indicator, the quality of the companies, is harder to judge in a short period of time. We built 12 very strong companies, working on deep tech ranging from water purification to healthcare computer vision. This cohort has made more revenue in 6 months than any of our London cohorts. So far, that seems to be an indicator of the quality of the companies, but we’ll only be able to tell in a couple of years from now.”
The business accelerator claims to accept less than 10 per cent of its applicants with an emphasis on technical founders with a strong background in STEM (science, technology, engineering & mathematics) domains.
Following their demo day at the end of the six-month acceleration period, investee firms receive an additional 18 months of support from EF in the form of hiring support and advise, collaborating with a dedicated funding team and continued mentorship from venture partners.
Venture partners of the accelerator in Singapore include Shao Ning Huang, See Ho Ting and Teik Guan Tan are some of Southeast Asia’s top exited founders, who have built household technology companies. The firm also counts Infocomm Investments, now SGInnovate, as its anchor investor in the city-state.
Technical founders, tech ecosystems
Given its focus on founders with a strong technical grounding, Droste, whose postgraduate qualifications have apparently accelerated her progression, shares: “Different types of companies require different qualifications. This is a slight simplification, but if you want to build an e-commerce company, your biggest risk is running out of money, so you’ll want to focus on getting really good at execution and fundraising.”
“You probably don’t need a PhD to do that. If you want to build a deep tech company, however, your biggest risk is not being able to deliver the tech,” she adds.
For a startup ecosystem like Singapore’s, whose labour force tends to be highly educated, entrepreneurs investing in their education may reap dividends. However, Droste notes: “EF has optimised the route to building a big company for a very particular type of individual: one with a deep technical background. We will help people with a deep understanding of a niche technical field figure out how to become a CEO or a CTO. That doesn’t mean people without that background can’t build big companies though.”
Given that startup ecosystems like Singapore are described as lacking technical talent pipelines, particularly in terms of deep tech, Droste maintains a contrary view.
In her view, the city-state has excelled in “attracting some of the brightest minds of the region, and even the world, to come study and do research here,” an attribute that has strengthened the city-state’s ecosystem.
“I’d encourage ways for smart, qualified tech talent to come to Singapore. I think a startup visa makes sense, but I think the bigger win could be to allow people who’ve been educated in Singapore a certain period of grace to stay in Singapore whilst they’re trying to start companies.”
Hardware startups, Singapore VCs
Singapore has been attempting to augment the hardware segment of the local startup ecosystem, which saw Applied Ventures launch an office in the city-state at the end of Q3 2016.
Applied Ventures invests up to $50 million every year worldwide, with deals ranging from $500,000 to $3 million. While the firm looks for good investment returns, it also seeks strategy synergy, investing both in ventures that have a clear connection to Applied Materials’ main business and in businesses where Applied has not exposure but which look promising.
The sectors its has invested in include cleantech, semiconductors, wireless energy, and others, with the corporate venture unit seeing exits through both mergers and acquisitions and IPOs,
Meanwhile, for the 2012-2016 period, Singapore’s seed – Series E+ deal data indicates that 2016 saw $1.35 billion in aggregate venture funding raised. By comparison, in 2016, the UK saw $3.65 billion in venture funding raised, while the US saw $54.6 billion.
Sharing her observations on the hardware startup space in ASEAN and Singapore, Droste said, “Hardware is a tricky one. I’m excited by the possibilities for hardware in Asia, both from a knowledge/legacy point of view (semiconductors, precision engineering) and from a manufacturing point of view. I think the venture landscape has to catch up with (deep tech) hardware. It’ll take longer and more funding to build a hardware unicorn, but I don’t see any structural reasons why it couldn’t be done here. I think ARM is an interesting example from the UK.”
Asked about how she sees the startup/VC ecosystem of the city-state evolving, especially as more Asian startups step out of Silicon Valley’s shadow, Droste argues: “I think Singapore shouldn’t want to be Silicon Valley.”