The Singapore government has strengthened its support for technology start-ups with the announcement that it will inject S$50 million into a fund to catalyse the early-stage investment ecosystem.. Through a 1-to-1 co-investment approach with leading VC firms, the total pool of investment funds for early stage companies will amount to S$100 million.

Speaking at the opening of Techventure 2013 on 25 September, Deputy Prime Minister Mr Teo Chee Hean noted that a vibrant technology start-up ecosystem is taking shape in Singapore. “Through our efforts to support translational research and provide seed funding and mentorship to start-ups, we are seeing a healthy pipeline of technology start-ups in Singapore,” he said. For example, the number of patents granted has risen by about a third from 245 in 2010 to 323 patents in 2012. More significantly, the number of spinoffs resulting from these technology transfer efforts has more than tripled from 12 in 2010 to 38 in 2012.

However, one piece of feedback that the government has received is that there is still a lack of early-stage financing in Singapore and the region, said Mr Teo, who is also the Coordinating Minister for National Security, Minister for Home Affairs, and Chairman of the National Research Foundation (NRF). “Start-ups have to try very hard to get the attention of VCs (venture capitalists) from other parts of the world in order to secure funding.”

Such government support will continue to play an important role in growing Singapore’s startup ecosystem, said Mr Chua Kee Lock, Group President and Chief Executive Officer, Vertex Management. Sharing his views at a Techventure panel discussion, Mr Chua said, “Without this support, the industry will disappear because of the logic of supply and demand. If you are a truly international investor, this market is too small.”

However, beyond monetary support from the government, start-ups themselves have to think big, and investors have to be more focused, if Singapore is to bring its fledgling technology companies to the next level.

Ms Jenny Lee, Managing Partner of GGV Capital, noted that while there are many investment grants available in Singapore, what is more important is for these resources to be focused on selected areas. “If all the seed funding is spread out and not focused to grow particular ones that are budding, the law of averages means that everyone will be average and most will not get through to second-round funding, so the chance to grow is limited.”

For GGV Capital, for instance, if the fund manager sees opportunities in the mobile space, it will drill down further to look at specific areas within mobile, and at the first set of companies that are going to come out with a great product with intellectual property protection, and that are closest to market and to monetisation. “It’s not just about the strength of the technology of the product. To survive, the companies need to have the ability to monetise,” she said.

They will also need to think big. “It is not enough to do a startup to feed yourself; your aspirations have to be bigger,” said Ms Lee. “Big companies like Google and Alibaba have changed the world, but they all started with aspirations that people may not have understood at first.”

For Singapore startups, there is an even greater need to have aspirations that scale. “We need to think big from Day 1 if we are going to be successful because we know the domestic market is not big enough,” said Mr Steve Leonard, Executive Deputy Chairman of the Infocomm Development Authority of Singapore (IDA). This awareness can even be parlayed into an advantage. “It forces people to think about what is possible outside the market,” he said.

Mr Leonard also observed that there are tremendous opportunities for Singapore startups because the country has strong legislative and technological capabilities, and its position at the crossroads of the Asia Pacific also exposes companies here to ideas from across the region. These ideas can be further developed through research and then monetised.

“We need to think about how we are going to build on the assets that we have,” said Mr Leonard. “It is not our goal to be another version of Silicon Valley. We want to create something that is right for Singapore.”