Singapore Venture Funding Landscape 2023 Full Year Report

Singapore widened its lead as the top investment destination in ASEAN 6 amid a global funding downturn in 2023, according to a new report published by DealStreetAsia in partnership with Enterprise Singapore. 

The report, Singapore Venture Funding Landscape 2023: A Full-Year Study, captures and analyses data on private funding bagged by venture-backed companies in the city-state, along with Indonesia, Malaysia, Vietnam, the Philippines and Thailand. 

Startups headquartered in the city-state accounted for 63.7% of all equity deals in ASEAN 6 in 2023, up from 56.7% in 2022. In addition, Singapore’s share of the total venture capital raised in the bloc during the year rose to 73.3% from the preceding year’s 62.5%. 

The country was not spared from the effects of the broader slowdown. Deal volume dropped 19.8% year on year, reaching 522 in 2023. Deal value also dipped as Singapore-based companies secured $6.1 billion – a 44.7% decrease compared to 2022.

However, these declines were lower than those seen in the wider ASEAN 6 region. Collectively, the bloc experienced a 28.6% drop in deal volume and a nearly 53% decline in deal value in 2023, according to the report.

Other findings of the report include: 

• Singapore recorded a 31.4% year-on-year increase in deep tech deals to 159 in 2023. In line with the larger funding downtrend, deal value in the sector fell 18.4% to $1.53 billion. Deep tech’s share of total private funding, however, soared to 25% last year, versus 17% in 2022. 
• Late-stage rounds’ share of the total deal value in the city-state fell to 50.2% in 2023 from 56.3% in 2022 as both deal value and volume halved. 
• Early-stage deals garnered a larger share of the total funding last year, accounting for 94.1% of the deal volume. Despite a 37% decline in total deal value, the median value – seen as a proxy for valuations – for early-stage deals witnessed minimal impact from the downturn. 
• Investors continued to evince strong interest in healthtech and sustainability last year. Healthtech deal volume more than doubled in 2023, while green tech transactions grew by 160%. In addition, total funding for green tech startups remained steady in a tough fundraising environment. 
• The report also looks at the funding bagged by companies across the four pillars of Singapore’s Research, Innovation, and Enterprise 2025 (RIE2025) Plan. There was an uptick in deal volume across the Human Health and Potential, Manufacturing, Trade and Connectivity, as well as Urban Solutions and Sustainability domains. The Smart Nation and Digital Economy domain was the exception, witnessing a decline in transactions last year. 

Interviews with local and regional venture capitalists indicate that investors are likely to maintain a conservative stance amid ongoing macroeconomic and geopolitical headwinds. Seasoned fund managers say this environment will foster the emergence and growth of robust, future-ready business models. 

Their optimism is supported by the large amount of unspent capital available with venture investors in the region, especially those based in Singapore. With a robust tech ecosystem and strategic government initiatives, the city-state is primed to benefit from this selective investment climate. 

Read the ‘Singapore Venture Funding Landscape 2023: A Full Year Study’ report for more.