ICO Boom Threatens Singapore's VC Scene

Questions are raised as to the future role of venture capital firms, especially if ICOs become an effective and sustainable avenue for startups to raise funds versus traditional venture capital funding.

When Uber bowed out of its Southeast Asian operations this year, it sent a clear signal to venture capitalists: transport and logistics startups have had their day. Whilst deals in technology, transport, and logistics, have dominated the scene and should continue to do so as seen in Grab’s $2.5b Series G funding, funds will now start to pour into promising areas such as blockchain, medical technology, and artificial intelligence.

Venture capital activity in Singapore is widely expected by analysts to maintain solid momentum not only for the rest of 2018 but also for the next few years due to an influx in growth-stage funds, a stronger corporate expansion drive into Southeast Asia, and an expected boom in attractive exit deals. But funds will likely have to fight tooth-and-nail for talent and deals amidst strong competition and a growing interest in initial coin offerings as an alternative fundraising path.

Notable deals

There have been a record 23 deals that raised US$2.68b of venture capital funding in the first quarter of 2018, surpassing previous records, said Kenn Lim, senior associate at CNP Law. “Whilst we are still in the early half of 2018, we have witnessed a vibrant venture capital scene in Singapore thus far.”

Aside from the Grab-Uber deal, which saw the largest amount raised globally from venture capital funding in the first quarter of 2018, analysts said another notable deal in the early part of the year was logistics startup Ninja Van raising US$85m in its Series C funding round, which was one of the largest ever raised in the region at that stage.