Huge deals in Silicon Valley are pushing Singapore to go all out to build its own version of the American technology zone as the start-up hub for Southeast Asia – a dream once shared by Malaysia’s Multimedia Super Corridor (MSC).
But Malaysia’s MSC that started in 1996 has now faltered into a real estate play known more for call centres rather than what it was meant to be: a test bed for cutting edge tech as well as home to start-ups.
Over in Singapore, the Wall Street Journal reported that excited by deals such as Facebook’s US$19 billion (RM62.7 billion) agreement last week to buy messaging company WhatsApp, Singapore’s policy makers and technology entrepreneurs are betting that one day a tech giant could swoop down to grab one of its own home-grown start-ups.
Venture-capital tech investments in Singapore last year outstripped those in Japan, South Korea and Hong Kong, the global business daily said.
It noted that the city state, with its population of just 5.4 million, was not quite Silicon Valley and has yet to produce anything like a Google or Facebook, much less a service like China’s messaging app Wechat, with 272 million monthly active users.
And while Singapore has had mixed success in trying to kick start innovation in various industries, including biotechnology, media and entertainment, the paper quoted investors as saying the technology ecosystem was becoming more active.
One concern is that insufficient entrepreneurial spirit among young Singaporeans and the government’s financial largesse could inadvertently enable some start-ups to limp along on state funds, a few analysts told the Wall Street Journal.
But in recent years, the Singapore government has been trying to fund local technological innovation by investing some S$100 million (RM260 million) for early-stage start-ups as part of the S$16 billion it has pledged for scientific research and development.
Well-known American venture capital firms, such as Andreessen Horowitz, have funded local start-ups, including video site Viki, which Japanese online retailer Rakuten bought for US$200 million in September.
Rakuten also agreed earlier this month to acquire Cyprus-based messaging app Viber Media, it added.
Another Singaporean tech firm attracting investors is RedMart, an online grocery-delivery service founded in 2011 that has raised more than US$10 million from investors, including Facebook co-founder and Singapore resident Eduardo Saverin.
One hot spot in Singapore’s fledgling start-up scene is a seven-storey, renovated factory building known as Block 71, west of downtown.
On a recent Friday evening, a few dozen technology entrepreneurs gathered to drink beer, nibble on cheese and almonds, and discuss their start-ups, the paper said.
Hugh Mason, a 47-year-old British entrepreneur, said there were about 100 start-ups and more than US$1 billion of investment under management in the building, the paper added.
In 2010, Mason and his friend, 38-year-old Singapore native and anti-spam pioneer Wong Meng Weng, co-founded Singapore’s Joyful Frog Digital Incubator, which hosts frequent gatherings at its headquarters in Block 71.
Wong, decked out in a three-piece suit and carrying the company’s green stuffed frog mascot Smoochy on his shoulder, moved about the room, introducing out-of-town visitors to regular attendees. A sign read, “Silicon Valley isn’t a place. It’s an idea”.
Venture capital invested in Singaporean tech firms by funds last year totalled US$1.71 billion. While that is behind China’s US$3.46 billion, it is ahead of Japan, South Korea and Hong Kong, according to data from Hong Kong-based Asian Venture Capital Journal.
PricewaterhouseCoopers LLP and the National Venture Capital Association put venture funding for software companies alone in the United States at US$11 billion last year.