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Is the party over in Southeast Asia’s post-coronavirus tech scene?
- As funds dry up in the post-Covid-19 future, there will be many losers. But there will be winners too
- Step forward teleconferencing, logistics, e-commerce and food-delivery firms
Reading Time:5 minutes
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Term sheets were exchanged, vetted and accepted. Series A funding for a Singaporean tech start-up was a done deal, or so it had thought. Then Covid-19 struck.
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“[The investors] just pulled out and said they couldn’t do it,” said an employee of the start-up. “Basically, all that was left was for them to wire the money over.”
Months of discussion came to nought. The investors said discussion would restart when the coronavirus situation had settled.
“We were stuck and even considered disbanding for a while. I had even found a job at another start-up,” the employee added.
Then a white knight arrived, in the form of funds from the Singapore government, which recently pledged another S$285 million (US$203 million) to support promising start-ups. Earlier this year, it set aside S$300 million to help deep-tech firms under the Startup SG Equity scheme, in which the government co-invests with third-party investors.
But experts predict that some start-ups will still fall by the wayside as the fallout from the pandemic becomes clearer. They will have to get used to funds drying up and retrenchments mounting – a far cry from the glory days of 2015-2019, when more than US$37 billion poured into the region as venture capitalists searched frenziedly for the next Facebook.
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