Deep tech venture investments are gaining traction in Singapore.
According to a statement by Enterprise Singapore, deep tech investments jumped 25 per cent on-year to $305.2 million (S$416.4 million) across 76 deals from January to September this year. These were investments in advanced manufacturing, urban solutions and sustainability, and healthcare and biomedical sciences.
Deep tech, however, still represents a small fraction – less than 4 per cent of all venture deals made over the same period. Enterprise Singapore attributed this to the lack of lead investors with the expertise and experience to back deep tech startups.
Edwin Chow, Enterprise Singapore’s assistant CEO for Innovation and Enterprise said: “While the numbers are still small, it is encouraging to see emerging VC interest in the deep tech domains. Globally, we see that ageing, wealthier population, as well as urbanisation and climate change will create a growing demand for new, innovative solutions.”
He continued: “We expect to see more deep tech startups being formed – be it through spinouts from our institutes of higher learning or incubators and accelerators – to address these needs. To succeed, they will require more early-stage venture funding.”
Breakdown by deep tech sector
Urban solutions and sustainability startups raised the most capital over the same period at $110.2 million (S$150.4 million), followed by healthcare and biomedical sciences startups at $108.7 million (S$148.3 million), and advanced manufacturing startups at $86.3 million (S$117.8 million).
The urban solutions and sustainability sector saw a significant growth of 56 per cent, mainly due to increasing attention to cleantech and sustainability. Enterprise SG also highlighted rising interest in agri-food tech startups this year, particularly under the government’s push towards developing Singapore into a food and nutrition hub for Asia.
Digital health startups comprised the majority of funds received under the healthcare and biomedical sciences sector, receiving $93 million (S$126.9 million), followed by pharma-biotech and other medtech startups which secured $15.68 million (S$21.4 million) in venture capital.
Beyond deep tech
Digital tech startups continue to dominate, accounting for 93.2 per cent of the total quantum. In the first nine months of 2019, the number of investments made in digital startups reached 278 deals, up from 145 the previous year.
Fintech startups in particular also crossed the S$1 billion ($0.73 billion) milestone in the first nine months of 2019, growing 69 per cent on-year.
Enterprise Singapore also highlighted growth across various stages of funding.
Early-stage funding almost doubled over the same period to $649.4 million (S$886.1 million) across 304 deals, while growth stage funding rose by 33 per cent to reach $9.2 billion (S$12.5 billion) in 83 deals.
Chow added: “Access to smart financing is essential to support the development of deep tech startups based in Singapore. We will continue to work with partners such as MAS to catalyse more smart monies into startups in deep tech domains. As we develop Singapore into a Global-Asia node for tech, innovation, and enterprise, we need to build on the momentum to capture and catalyse more venture activities here.”