[Startup Struggles ⑤-1] Singapore, the Land of 'Grab'... A Startup 'Sanctuary' Equipped with Money, Talent, and Networks

Startup Ecosystem Southeast Asia No.1 & Global No.14 Singapore
Serving as Southeast Asia's 'Gateway' Attracting Capital and Talent
Government Actively Supports... Establishing a Virtuous Cycle in the Ecosystem

On the 14th, a Grab driver was delivering food around Chinatown, Singapore. Grab, which started in mobility services such as ride-sharing (carpool) like Uber, is expanding its service areas into various fields including finance and food delivery.

[Singapore=Asia Economy Reporter Minwoo Lee] There is a company that has remained unshaken even as the dominance of the ride-sharing (carpool) service 'Uber' swept across the globe. It is 'Grab,' the flagship mobility company of Singapore that absorbed Uber in its 'backyard' Southeast Asia region. Valued at over 6 trillion won, Grab is rising as a mobility 'giant,' and the reason behind its success is Singapore's robust startup ecosystem. It is a stage where abundant capital, full government support, and talents emerging from a population of over 600 million come together, allowing businesses to freely operate and expand. This is also why Anthony Tan, Grab's CEO and founder, decided to naturalize in Singapore, leaving behind his hometown Malaysia.

◆The 'Gateway' of Southeast Asia Attracting Networks and Resources= "If you want to succeed as a startup in Southeast Asia, head to Singapore." This phrase has become a 'golden rule' in the startup industry. In fact, Singapore is leading Southeast Asian startups as capital and talent converge there. According to the 2019 startup ecosystem rankings (city-based) released by global startup analysis firm Startup Genome, which comprehensively evaluates fundraising, talent, and company performance, Singapore (14th) was the only Southeast Asian city to make the top 20. Its competitor, Hong Kong, ranked only 25th. Capital also poured in. According to Cento Ventures, Singapore-based venture capital (VC) firms invested $5.99 billion in the technology sector in the first half of last year, accounting for 25% of the entire Southeast Asia region?nearly double the previous year's 13%.

The largest shared office startup in Southeast Asia, JustCo, also started with this insight. Andy Sim, Vice President of Digital Innovation at JustCo, told Asia Economy on the 13th at JustCo's Marina Square branch in Singapore, "We have operated our business to maximize the use of capital and talent concentrated in Singapore while building diverse networks based on Southeast Asian culture. This is something that early entrants from other cultures, such as WeWork, cannot replicate, which allowed us to become the largest shared office company in Southeast Asia." Based on this, JustCo surpassed a corporate valuation of $200 million six years after its launch in 2011. Currently, it operates 40 branches across seven countries including Thailand, Indonesia, and Malaysia, and has partnered with 'KILSA,' a specialized support organization for Southeast Asian market entry, playing a strong bridging role in startups' 'step-up' efforts.

Andy Sim, Vice President of Innovation at Singapore shared office company JustCo, is explaining the business strategy to reporters on the 13th at JustCo Marina Square in Singapore.

Eightwire, a data exchange specialized startup from New Zealand targeting the Southeast Asian market, is a representative case. Although it has independently partnered with a government agency in Thailand, it is pushing for entry into Singapore together with JustCo and KILSA to expand across Southeast Asia. Philip Park, co-CEO of KILSA, explained, "Governance in the Southeast Asian cultural sphere differs from that of China or the European Union (EU), and the success of new technologies, systems, and businesses is often determined by leading countries such as Singapore, the Philippines, Indonesia, Thailand, and Malaysia. Especially, if business viability is verified in Singapore, it is recognized as having the potential to expand throughout Southeast Asia."

◆Powerful Government Support= Not only the industry but also government efforts have greatly contributed to ecosystem formation. The agenda of a 'sustainably growing nation' was emphasized by Singapore Prime Minister Lee Hsien Loong in this year's New Year's address. Startups were cited as the key driving force for realizing this agenda. This is the background behind the full support provided by the Energy Research Institute at Nanyang Technological University (ERI@N), Singapore's top science and engineering university. Min Hogan, Innovation Manager at ERI@N, told Asia Economy in Singapore on the 14th, "Under the agenda of a sustainably growing nation, the energy research institute has begun to focus on startups. Since the energy-related industry requires initial investment and support, the government has stepped in directly."

Minhogeon, Manager of the Innovation Division at the Energy Research Institute (ERI@N), Nanyang Technological University, Singapore (left), is explaining the government's startup promotion policy during a meeting with Asia Economy at JustCo Marina Square, Singapore on the 13th.

Currently, ERI@N is not merely an energy research institute but has evolved into a startup nurturing and support organization. Beyond new technology R&D, its biggest goal is commercialization, and it provides various support. Manager Min explained, "Although the technologies alone cost tens of billions of won, we assist commercialization through various attempts such as providing the Nanyang Technological University campus itself as a testbed. For example, we have built energy-related systems on Singapore's southern Semakau Island and provide various data such as power generation and consumption scale, enabling startups to challenge large-scale business items like smart grids."

What is particularly effective is that ERI@N's personnel consist not only of academic experts but also professionals with field experience in various sectors. Manager Min emphasized, "Many field-experienced experts with technology readiness levels (TRL) 7 to 9 capable of productization and commercialization are stationed here, managing all fields for sustainable development such as renewable energy, smart cities, autonomous driving, battery technology, and carbon energy reduction." Through this process, technology-based startups like Transphy (wireless charging) and iSpot (power consumption optimization) have already become independent.

◆Consistent Regulatory Policies Foster Ecosystem Virtuous Cycle= Regulatory uncertainty, the biggest obstacle for innovative startups, is relatively low. Although it takes some time, private sector opinions are carefully reviewed and accepted, and once a direction is set, it is consistently maintained. Drone-related policies are a representative example. Researcher Min said, "We have already held 17 public hearings while creating regulations related to drone pilot operation facilities in cooperation with the Civil Aviation Authority of Singapore. When implementing the sandbox system that allows business models that cannot apply current regulations under certain conditions, we include companies, government, and non-governmental organizations to gather diverse opinions and set a major direction, which we then steadily pursue."

In particular, the regulatory sandbox was first introduced in 2016 by the Monetary Authority of Singapore (MAS) in the financial sector and has since expanded its scope to transportation, energy, medical, and environmental sectors through collaboration with various ministries. With this policy direction established, the Sandbox Express system was introduced in 2018 to expedite processing. For companies with innovative technology and sound business models in the financial sector, business approval is granted within 21 days of application. Picasso Terrence, CEO of Asia Wide Capital, said, "Because of this consistent policy direction, investors can make quick decisions, which is advantageous. There is a widespread consensus in the investment industry that even small businesses can grow like Grab by utilizing networks like JustCo, thus creating a virtuous cycle of startup creation and investment."