Foreign tech startups leveraging Singapore’s brand to venture overseas

Foreign technology startups are leveraging Singapore’s brand to scale their businesses and venture overseas by attaining accreditations issued here.

“We are seeing an increasing number of frontier tech startups emerging at the intersection of radical scientific breakthrough and real-world implementation,” a spokesman for the Infocomm Media Development Authority (IMDA) told The Straits Times.

Since the IMDA launched its accreditation programme in 2014 and its Spark programme for early stage startups in 2018, more than 180 companies have benefited from them, winning more than 2,800 projects in government and enterprise sectors as at March 2023, she said.

The Republic is one of the leading startup hubs in the region, with more than 4,000 tech startups, 400 venture capital firms, and 200 incubators and accelerators.

“We are also known to be one of the biggest fund magnets in Southeast Asia, attracting close to $700 million in tech startup funding just over the first quarter of 2023,” said the spokesman.

Singapore is also often seen as a great test bed for new technologies, given its status as a key business and financial hub in the region. The spokesman said IMDA works with international partners with the aim of making Singapore a hub for tech products and solutions, and to deepen the talent pool here. This “landing pad” network lets local firms expand internationally while the IMDA can bring in promising overseas startups. It has partners in Britain, China, Spain, Japan and South Korea. The South Korean partnerships have been notably successful, benefiting more than 100 local and 60 South Korean startups.

IMDA-accredited startups, including those in artificial intelligence (AI), big data, cyber security and quantum computing, are reported to have quadrupled their revenue during their time in the programme while growing capital investment. About $1.1 billion of new growth capital has been invested in the IMDA’s portfolio startups, while 20 have exited through mergers and acquisitions or initial public offers, the spokesman said.

Ms Jennifer Zhang, Chief Executive of Wiz.ai, which deploys conversational voice AI technology in enterprises, attributed the firm’s success here to IMDA.

Ms Zhang, a Chinese citizen who relocated to the US and is now based in Singapore, said: “The IMDA accreditation programme, as well as the strong network, gave us an additional boost and validation as we were just launching.”

She was attracted by the Singapore Government’s support for tech startups, including research and development programmes, seed funding, infrastructure investments and talent promotion.  

Wiz.ai’s biggest markets include Indonesia, the Philippines and Thailand, and it plans to set up in Latin America and the Middle East.

Mr Abhishek Chatterjee, Founder and Chief Executive of Tookitaki, an anti-money laundering software developer incorporated here in 2014, said IMDA accreditation has made it easier to do business and get funding, and has positioned the company among qualified contenders to secure contracts.

Singapore’s UOB was the first financial institution to leverage Tookitaki’s product, leading to a wider roll-out across the region.

Mr Chatterjee said a client’s review process, which could take up to six months, could be halved when part of the evaluation is already covered by IMDA accreditation.

Thunes, a cross-border payments company, bought a majority stake in Tookitaki for about US$20 million (S$26.9 million) in 2022. 

Some Chinese startups concerned about the suspicion surrounding Chinese tech are also tapping the local-accreditation avenue to improve their business prospects, notably in the United States.

A chief executive of a Chinese startup who spoke to ST on condition of anonymity said US-China tensions made the road to the West bumpier, and meeting compliance requirements had become more difficult. That changed when he registered his company in Singapore. The firm obtained local accreditations that helped it win the confidence of customers, and potential investors like US venture capital investor Sequoia Capital. 

A partnership with IMDA meant the company, which specialises in AI solutions, was well positioned to execute the next growth phase, including a foray into the US.

The CEO said: “Being accredited by IMDA helped allay doubts and uncertainties anyone had with regard to the use of the technology.”

The company opened its first US office in Silicon Valley in early 2023.

Australia-linked Workato, an enterprise automation platform, is another foreign startup that leveraged Singapore’s accreditation and expanded overseas. It is using Singapore as a springboard for a $300 million expansion in the Asia-Pacific region as companies look to digitalise their operations.

Source: The Straits Times ©️ SPH Media Limited. Permission required for reproduction.