Singapore startup ecosystem outranks Shanghai, Seoul, Tokyo

SINGAPORE — Singapore is cementing its position as a leading startup and venture capital hub, entering the top 10 for the first time alongside some of the world’s biggest tech ecosystems like Silicon Valley, New York and London, according to a new industry report.

According to the latest global study by Startup Genome, a U.S.-based research company, the city-state now ranks 8th after surging ahead 10 places from last year. In Asia, it placed second behind Beijing, which fell two places to 7th in the same period.

Singapore’s greatly improved tech startup ranking came despite the Southeast Asian city-state suffering a severe funding winter caused by rising inflation and a slowing economy. (Photo by Fumito Akiyama)

The annual report studied 3.5 million startups across 290 ecosystems. An ecosystem is defined as a shared pool of resources, generally located within a 100 km radius in a given region. The top 40 ecosystems were ranked on six factors: performance, funding, market reach, connectedness, talent and expertise, and knowledge.

Overall, Silicon Valley came in first, having dominated the top spot since 2012, while New York City and London tied for second place.

Singapore, the only Southeast Asian nation in the rankings, has leapfrogged regional peers Shanghai, Seoul and Tokyo. The city-state scored high on factors such as funding and connectedness.

Home to around 4,000 tech startups and over 400 venture capital companies, the city-state now has 18 unicorns, more than four times the global average of 4. Early-stage deals also rose 33%.

“With its pro-business environment and booming digital economy, Singapore is an attractive hub for international startups and businesses,” the report said.

Singapore’s improvement in ranking came despite the Southeast Asian startup hub enduring a severe funding winter on the back of rising inflation and a slowing economy.

The report noted the importance of strong exit opportunities for investors to make a return on Singapore’s rise, including public listings, mergers and acquisitions, buyouts and reverse mergers.

Deals worth over $1 billion doubled to a total of four, including superapp operator Grab’s public listing in late 2021. The Singapore-based company was the highest-valued exit for the ecosystem at $40 billion, the report said.

Southeast Asia’s tech ecosystem saw a surge in mergers and acquisitions last year, as both foreign and domestic investors acquire local tech companies. The region reached an all-time peak in 2022 with 176 deals, up 50% from a year ago, according to DealStreetAsia.

“A significant driver of tech M&As in 2022 was the massive private capital raised by regional startups in the previous year,” DealStreetAsia said. Singapore saw the most deals in the region, accounting for 46% of the total — ahead of Indonesia and Malaysia at 27% and 12%, respectively.

More recently, however, industry players said that Singapore’s record M&A deals was also partly due to a growing number of startups slashing their valuations in the face of the tougher fundraising environment, thereby enticing investors wishing to acquire them.

Nick Davies, a Singapore-based partner who specializes in cross-border venture capital funding and mergers and acquisitions at global law company King & Wood Mallesons, noted the city-state has a large presence of multinationals, many of which have corporate venture capital arms.

“In times when venture capital fundraising is more difficult, we would expect to see an uptick in funds raised from corporate investors, or strategic partnerships or acquisitions by multinationals,” Davies told Nikkei Asia.

“Anecdotally, we have been involved in a number of these deals, where more moderate investment valuations combined with strategic collaborations or partnerships with corporates have helped create a win-win situation for both emerging companies and multinationals,” he said.

Singapore surged the most in startup ecosystem ranking
11Silicon ValleyU.S.
22New York CityU.S.
46Los AngelesU.S.
57Tel AvivIsrael
1210SeoulSouth Korea
Source: Startup Genome


Consultancy Industries

We offer a variety of business and management consulting services that support your needs today while continuing to meet your needs in the future. We offer a suite of solutions to support your growth plan and the optimization of your organization as a whole.