There’s a dearth of quality seed deals in Singapore, as founders depart for greener pastures like the Silicon Valley while entrepreneurs from other parts of Southeast Asia come to close the region’s talent gap. This landscape shift has begun to push seed investors like STRIVE (earlier known as GREE Ventures) further abroad to find Asia’s next billion-dollar company.
Nikhil Kapur, partner at STRIVE, which closed its 12 billion Japanese yen (above $100 million) third fund in end-2019, said it has barely seen any strong seed startups in Singapore of late, particularly in the B2B, SaaS and product-led sectors it invests in.
“To be frank, Singapore is not really where we are spending a lot of time at this point,” said Kapur, adding how the tech talent belonging to the first wave of SaaS startups in the country, which include TradeGecko, Pie and Deskera, are increasingly shifting abroad. Singapore’s heavy emphasis on deep-tech over the last few years has also sucked the ecosystem dry of any potential upstarts in B2B and SaaS sectors.
The B2B market makes tremendous sense at a time like today, with consumer-facing apps like Uber, Grab and Gojek losing lustre among investors for their short-sighted ways of doing business. It’s a sector that’s far less crowded and far less competitive.
But even so, strong leads are hard to come by. Until this market matures, STRIVE believes it’s more likely to find better quality B2B, SaaS startups in India, a market it also deploys capital in. Several Indian companies are leading the way in this respect and these include prominent names such as Freshworks, Zoho, Kissflow, which have lured capital in millions over the recent years.
The presence of downstream SaaS investors like Tiger Global also paint a more positive picture for the Indian market. Kapur notes that such investors in the later Series A, B and C rounds are still absent in Southeast Asia – an indication that it’s still very much early days in this market.
Edited excerpts from an interview with Kapur, and STRIVE’s investment manager Ajith Issac: