A drive across this city-state takes less than getting from San Francisco airport to Silicon Valley. But Singapore’s making up for its lack of space by making it easier for startups to access funding and resources, as a Singapore foodtech startup ecosystem starts to grow.
Everything grows fast in Singapore. Plants fare well in the near-equatorial climate and that growth pun extends to its venture funding activity, which has ballooned by over 1,200% in over the last six years to $10.5 billion in 2018, from just under a billion in 2012, according to Enterprise Singapore (ESG), the country’s governmental agency championing enterprise development.
And the figures don’t stop there. Temasek Holdings, Singapore’s state investment firm, tells AFN that they have invested some US$5 billion in the broader agri-foodtech sector in the last five years.
Singapore’s Startup Scene: A Snapshot
Source: Enterprise Singapore
While Singapore has little farmland to grow crops the traditional way, the city-state is growing its foodtech and agtech ecosystem with both financial and non-financial backing from the government to give homegrown talent the boost it needs.
As well as backing several investment funds and accelerators in the sector, including AgFunder’s own GROW Accelerator (apps open now!), Enterprise Singapore’s investment arm SEEDS Capital also co-invests directly. Earlier this month it announced its first agri-foodtech co-investment with Openspace Ventures in Nutrition Technologies to establish Southeast Asia’s largest hi-tech commercial-scale insect protein production facility.
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This move by SEEDS Capital follows another significant event in January, when it selected seven co-investment partners to inject more than S$90 million ($65 million) into agri-foodtech startups with roots in Singapore. Those partners include AgFunder as well as local VC VisVires New Protein (VVNP), aquaculture accelerator group Hatch, ID Capital, Openspace, The Yield Lab, and Trendlines.
It’s such initiatives that help drive growth and innovation in the sector, especially while startups struggle through the initial baby steps.
“At the beginning, fundraising and getting attention was quite tough. Now, our mission is getting quite a bit of attention with more investors and governmental assistance focusing on this area. So it’s getting easier (for start-ups like us),” says Alan Phua, CEO & Master Builder of Alchemy Foodtech. His company, which aims to fight diabetes through food technologies, secured pre-series A funding of S$2.5 million in late 2018, co-led by SEEDS Capital.
Alchemy Foodtech was also a winner at the 2019 AgFunder Innovation Awards, clinching the title of the Most Innovative International Startup Pre-Series A. Check out the full list of winners, here.
Investor stalwart Temasek Holdings has also recently extended its reach to local companies making inroads in sustainable food such as Sustenir and Apollo Aquaculture, marking a shift from investments into US companies like New York-based Bowery Farming. Apollo Aquaculture has plans to build a S$70 million highly-automated, eight-storey fish farm to deliver a twenty-fold increase in its annual output of fish.
Temasek, whose Bonds have been rated “Aaa” by Moody’s Investors Service, takes pride in what it calls a “vibrant” funding ecosystem, buoyed by governments and private investors alike, bettering that of countries such as The Netherlands and the US.
“Singapore’s already promoting this industry much better than other places I’ve seen. However, success long-term will be driven by bringing the ecosystem together, the participants, corporates, all coming together. And that’s when you actually connect the dots. Because the collective power of everyone coming together is much more than an individual,” says Temasek’s MD, Anuj Maheshwari.
Singapore’s efforts gaining traction
‘Hotbed’ and ‘springboard’ are a couple of words many investors and startups we’ve spoken to have used to describe the Lion City. In fact, the latter was used by VVNP’s partner Gerard Chia when we asked him what startups worldwide were looking to Singapore for.
“Singapore’s reputation as a stable, English-speaking country is a major attraction for companies we invest in. They see it as a springboard into the rest of Asia. There’s a large presence of food conglomerates here, as well as a natural deal flow coming from outside of Asia. Now, this is due to Singapore’s name, and Asia’s potential as a whole.”
However, Chia notes that though global interest in Singapore is burgeoning, homegrown startups have yet to flex their viability as potential investments.
“As a result of our deal (with SEEDS Capital), we are seeing more companies where innovation has emerged somewhere else setting up shop in Singapore, rather than from the country itself. It’ll take some time for some of these measures to grow the ecosystem to take effect,” says Chia. He notes an influx of plant-based meat replacement startups from within the nation, which he says has “siphoned attention away from more pressing issues or food solutions that are more creative or impactful”.
Chia cites a company in his portfolio, Nutrition Innovation, as an example of a local startup “punching above its own weight.” In March, VVNP led a $5 million Series A for Singapore-based Nutrition Innovation, which produces “healthier” sugar, marking their first investment in a Singapore-incorporated company.
Behind every successful startup… is its team!
Adding to the financial push, efforts have also been put in place to ramp up another key resource – human talent. Just in July, Singapore’s Economic Development Bank (EDB) and Enterprise Singapore also launched [email protected], a two-year pilot program to help technology companies grow in Singapore and expand in the region. Qualifying companies will have the Employment Pass (EP) applications of their core team members facilitated under the program. It’s expected to kick in in Q4 and targets high-potential companies in growth areas such as digital, medtech, biotech, cleantech, agritech, and fintech.
We at AgFunder have also joined forces with Enterprise Singapore, EDB and Rocket Seeder to launch the city state’s first agri-foodtech accelerator program, GROW. It was launched concurrently with AFN Asia (how do you feel about our cool new look?), which will specifically focus on news and research around agri-food innovation and investment in the ASEAN region.
To find out more about GROW, click here. Registrations for startups close on August 19.
AFN spoke to Mr Ted Tan, deputy CEO of ESG, for his personal insights on the Lion City’s Ag + Food tech growth potential.
Joe Gan: How do you view Singapore’s competitiveness in terms of governmental funding/support for Ag + Food tech?
Mr Ted Tan: Singapore’s strong innovation climate makes it a conducive place for agri-food technologies to take root. Together with a reliable intellectual property and standards framework, and a pro-business environment, these attributes create a solid foundation for technology transfer and product development in the agri-foodtech sector.
We have received interest from numerous Singapore-based startups and are working closely with our co-investment partners to evaluate their proposals. We also work with these startups to fine-tune their ideas so as to encourage product improvement in order to secure more investment opportunities in the future. The startups range from developers of alternative proteins, aquaculture farming companies and those operating in the area of food waste valorization.
Financing opportunities aside, the ecosystem has also benefited from events such as Future Food Asia and Indoor Ag-Con Asia which have been instrumental in connecting international stakeholders across the value chain to co-create and co-innovate. It is through these platforms that our Singapore companies and startups can establish mindshare, spark collaborations, uncover new talent and nurture long-term relationships.
In addition, Singapore companies have strong brand presence which is largely attributed to our solid reputation in food safety and quality. This is something that took many years to achieve and will continue to become a differentiator for our food exports and for market access. The rising affluence of the middle class in Asia will also heighten the need for quality assurance, an area which Singapore has a competitive edge in.
What are your thoughts on Singapore’s “30 by 30” goal? What is Enterprise SG’s role in getting the country there?
Enterprise Singapore’s role as an enterprise development agency is to strengthen the enterprise
ecosystem and support companies to build their capabilities to keep pace with emerging industry trends, scale and grow overseas. This approach is critical to drive innovation in the food industry, from pre- to post-harvest.
Beyond uplifting Singapore’s capabilities to grow locally and to accelerate internationalization efforts, we support companies to source for alternative urban agriculture and aquaculture production sites as well as to develop products that have high export potential.
For post-harvest innovation, Enterprise Singapore is leading FoodInnovate, an initiative that was rolled out in April 2018 to position Singapore as the leading food and nutrition hub in Asia. It seeks to drive food innovation through four key pillars – infrastructure, knowledge-building, co-innovation and disruptive technologies. This will enable our companies to produce, test-bed and commercialise products to meet consumer demands and nutrition needs of the future.
Where do you see the AgTech investment scene in the next 10 years? What are the challenges the sector is facing locally?
As with emerging sectors, securing funding can be difficult. Anchoring the seven co-investment partners in Singapore is a start. My sense is that this sector will continue to develop, as can be seen by how enhancing the ability to produce food locally to cope with food security concerns is earning considerable attention from individuals, communities and governments alike.
The threats to food security are diverse; ranging from erratic weather patterns, fluctuating commodity prices, protectionist trade policies, and uncertain geopolitical landscapes. If we don’t innovate the way we produce food today and do so in a sustainable manner, we will begin to face many health and nutritional concerns.
ESG has identified six growth potentials: elderly nutrition, food waste valorization, biodegradable food packaging, urban agriculture, aquaculture and alternative protein. I am confident that with agri-food tech accelerators like GROW, that bring in mentors and industry experts, Singapore will be an attractive location to help startups accelerate their growth and gain faster access to new markets, new customers and new investors.
To find out more about GROW, click here and apply before the August 19 deadline. Stay tuned to find out the exciting line-up of startups we select for the accelerator in the coming weeks!