Singapore's entrepreneurship ecosystem is having a steady start to 2016 despite startup valuations going south.

Serial entrepreneur Leslie Loh, who runs startup incubator Red Dot Ventures, said that the global economic slowdown, coupled with the pessimistic, cautious investing sentiment from the US, have rubbed off on investors in Singapore and Asia through the early part of the year.

Singapore funding in fact is up: US$275 million in 37 deals in the first quarter versus US$183 million a year ago. Last year's record was US$549 million with 31 deals in Q3, according to Tech in Asia Research. Total investment amount in Asia in Q1 2016 was US$17.29 billion in 850 deals, up from US$14.82 billion in Q1 2015. In Q3 2015, the numbers were US$22.2 billion and 1,063 deals.

Funding activity is likely to lag further with the expiry of the Technological Incubation Scheme (TIS) in June, said Mr Loh. This will cause a fall in the number of investments into seed-stage infocomm startups, a decrease of as much as 30 per cent in the next 1-2 years, he cautioned.

TIS is a scheme through which the National Research Foundation co-invests in seed-stage infocomm startups alongside tech incubators. Since 2008, it has backed over 145 startups. Mr Loh said: "Seed-stage investment is critical to the early-stage startup ecosystem as it provides bridge funding to develop sufficient deal flow for venture capital investment."

Source: The Business Times (published on 23 May 2016)



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