The University Startup Ecosystem in Singapore

The University Startup Ecosystem in Singapore

Since Protégé Ventures’ inception in 2017 as Southeast Asia’s first student-run venture fund, our team has had the privilege of forming deeper connections within the local university startup ecosystem — with founders, angel investor networks, startup incubators and accelerators, and early-stage venture capital (“VC”) firms.

Over the past two years, we have reached out to over 250 passionate student founders (broadly defined as students or recent graduates) to learn more about the latest innovative ideas that they are working on, and have gleaned insights from the multiple stakeholders that support them. Through our interactions and analysis, we have formed a comprehensive perspective about the state of Singapore’s student entrepreneurship space. This article reports on key trends and insights that may be helpful for both student founders and potential investors in the space who wish to understand more about Singapore’s university startup ecosystem.



At a glance: Singapore’s early-stage startup landscape

Singapore is a regional hotbed of innovation and is ranked among the Top 30 Global Startup Ecosystems, according to U.S.-based Startup Genome’s 2019 report. It was the only Southeast Asian country to have made the list. Over the past decade, Singapore has produced numerous successful startups, including P2P e-commerce site Carousell and last-mile logistics company Ninja Van; both of these examples have had humble beginnings as student-founded startups.

The top startup ecosystem in Southeast Asia observes strong growth in early-stage deal activity, which may be attributed to the setup of new accelerators, pre-seed and seed funds addressing the pre-seed/seed funding gap

Startup investments in Singapore reached S$6.8 billion in the first three quarters of 2019, across 430 deals. This figure excludes Grab’s Series H round, which raised c.$6.5 billion from investors like the Softbank Vision Fund and Microsoft. Investments in seed and Series A rounds amounted to S$886 million, doubling from the prior year, and constituted 69.7% of the total number of deals in Singapore.

According to a research article by Cento Ventures, the ramp up in early-stage deal activity in Singapore across the past few years is partially attributed to the setup of new accelerators, pre-seed and seed funds addressing the early-stage (i.e. pre-seed or seed stage) funding gap like Antler, Entrepreneur First, and Hustle Fund, which all began their investment activity from 2017–18.



As an active investor in (extremely) early-stage startups over the past two years, we have listed some of our key observations below.

Observation #1: Consumer, enterprise software and e-commerce startups are more prevalent in Singapore’s university startup landscape

The top three sectors observed from our pipeline were: Consumer (15%); Enterprise Software Solutions (9%); and E-commerce (8%) (Figure 1). The Consumer sector was a broad category comprising startups involved in food & beverage, social networks, travel-related services, and wearables.

We observe that student founders gravitate towards starting niche ventures in product or service categories that relate more to the pain points encountered by the student community or millennials. This is intuitive as they are likely to have experienced it themselves, enabling them to more accurately pinpoint specific issues or needs. Additionally, resourceful student founders may possess the advantage over older and more experienced entrepreneurs in reaching out to target customers, who may be their peers within the university ecosystem.

We were not surprised that e-commerce emerged among the top three verticals of deals sourced by our team, given the ubiquity of online shopping among Singaporean youths and young adults. We also note that there have been various student or recent graduate-founded startups built around the e-commerce industry that have raised funding from institutional investors within 2–3 years of inception. Rely, a fintech enterprise offering interest-free installments on e-commerce purchases, raised a seven-figure pre-Series A funding round from both strategic investors and a family office. Janio, a cross-border logistics services for e-commerce transactions, has also raised funding from an early-stage local venture capital fund, Insignia Ventures Partners.

Observation #2: While there is increasing investor interest in deep tech startups, deep tech has not been one of the hottest verticals in the university startup landscape

Investor interest has also grown in deep tech startups, specifically in the sub-verticals of advanced manufacturing, urban solutions/sustainability and healthcare and biomedical sciences. Deep tech startups raised S$416 million for the first three quarters of 2019, a 25% increase from last year. Enterprise Singapore noted that the founders of many deep tech startups are either local researchers or university graduates who had locally-produced intellectual property (“IP”).

Interestingly, from our deal pipeline over 250 startups over the past few years, we have found that deep tech is not a commonly-explored vertical by student founders, particularly at the undergraduate level. This is likely due to the higher level of technical expertise or subject matter knowledge involved in developing a working product with commercial applications.

Observation #3: Personal networks, accelerators and LinkedIn emerged as the top three channels where student-founded startups are sourced

While student startups are sourced from numerous channels, the most common methods include reaching out to personal contacts; social media; incubators; networking events; and start-up pitching competitions (Figure 2).

We have found that “personal networks” is the channel from which the highest number of deals has been sourced, constituting 31% of our total deal count. This could indicate that student analysts, many of whom have a strong interest in either entrepreneurship or are aspiring to be a VC, are already reasonably well-connected to like-minded and entrepreneurial peers. We can draw parallels of this to the professional VC world where investors primarily tap on their personal connections for access to quality deals too, given a greater level of comfort they take in potentially working with founders they personally know and trust. Moreover, familiarity with founders usually helps in enabling the VC to get information more quickly, shortening the time required in the due diligence process. As such, we would recommend that student founders to build up more connections within the ecosystem to gain more visibility among investors and increase the likelihood of receiving a follow-up.

Accelerators produce the next highest deal flow for student-founded startups, constituting 27% of our deal count. These accelerators could be sector-agnostic, such as Antler, Found and StartupX, or specialty accelerators such as Entrepreneur First. Student founders of this source tend to be of an older demographic, pursuing post-graduate degrees such as MBAs and PhDs. This could be due to the recruitment process of such accelerators where candidates targeted for the program have typically accumulated several years of working experience or have developed specialized skills. It could be ideal for investors to look into accelerators as a pipeline for potential deals as quality founders are screened prior to the program and given training to ensure that the start-up is investor ready.

LinkedIn ranks as the third highest source for student startups, constituting 21% of our deal pipeline. LinkedIn provides a mix of both inbound and outbound deals, where student founders use social media messaging to reach out to potential investors and vice versa. This could be due to the professional image that LinkedIn provides that allows both sides to have a proper context of contacting each other, while having the benefits of a social media where one can get connected to multiple people at once. This positions LinkedIn an ideal channel for cold leads for student founders and investors.

Observation #4: Startups founded by students or recent graduates can raise respectable seed or pre-Series A funding rounds within 1–2 years of inception

We have looked at student-founded startups across numerous sectors, including e-commerce, logistics, edtech, fintech, human resources, and even more niche segments like food waste management and artificial intelligence in animation.

We highlight four student-founded startups — Cudy, Janio, Rely and StaffAny — which hail from a diverse range of sectors, as notable examples of success. Each of these startups have recently obtained sizable venture funding rounds (some even raising seven-figure amounts) from angel and institutional investors between 6-18 months after inception, which is no easy feat even for an average entrepreneur, let alone students or recent graduates. The variety of sectors these startups operate in also demonstrates that successful fundraising can be accomplished regardless of vertical.

Additionally, these success stories suggest that local investors are increasingly comfortable with investing in teams that are fully-committed to designing and executing on a compelling solution to a large and expensive problem, despite the fact that team members may be fresh out of school and lack previous industry or operational experience.

However, it is worth noting that most student-founded startups that manage to successfully raise large rounds of funding are led by recent graduates, not current students.

In 2018, 34% of the startups our team sourced had at least one co-founder still studying, indicating that a large majority of the the startups at the fundraising stage are headed by recent graduates. We have observed that student founders who are still studying in local universities tend to be more risk-averse and are still grades-focused; their startups are usually a side passion that they work on during their free time outside of school commitments. Hence, it is reasonable to expect that many startups which manage to raise bigger rounds (e.g. seed funding) from institutional investors tend to be led by recent graduate founders who are able to provide full-time commitment to operating and growing the venture.

Observation #5: Student founders of institutional-backed startups were involved in entrepreneurial extra-curricular activities at their universities

An interesting trend we observed among prominent student-founded startups that have raised sizable funding amounts from institutional backers was that their founders were typically involved in entrepreneurial extra-curricular activities at their universitiessuch as NUS Overseas Colleges (“NOC”) and EAGLES at Singapore Management University (“SMU”), or in external organisations, such as e.g. Kairos.

This suggests that the majority of student or recent graduate startup founders demonstrate their passion for entrepreneurship early in their university careers, and that entrepreneurship programmes and/or clubs are excellent grounds for bringing like-minded aspiring entrepreneurs together. Three of the four ventures featured above were conceptualised and seeded while in university (towards the end of the founders’ student candidature), and the founders committed to their startups full-time post-graduation, which is when growth started ramping up significantly.

Observation #6: Many student-founded startups that successfully raise sizable funding rounds are led and managed by close-knit teams with high levels of respect for one another

Excluding Cudy (sole founder), the founding teams of three of the other four startups comprised friends who knew one another in school; have worked together previously; or were introduced to one another via a mutual, trusted contact. This indicates that intra-team trust and cohesion (i.e. the ability to work well together, complement one another’s strengths and supplement one another’s weaknesses) are integral to student founder teams that successfully raise money from more sophisticated institutional investors.



Our perspective as a pre-seed investor in the local university startup ecosystem

Our team has found that many student founders are big-picture thinkers with fresh perspectives on approaching and solving today’s problems. They are passionate about the pain points they are addressing — which are usually personally relevant to them or are affecting their peers — and hungry for success. Many are willing to make large sacrifices to achieve their goals, from foregoing potentially lucrative careers to making difficult lifestyle choices (e.g. giving up on social activities) in prioritising their startup’s growth.

These observations led us to focus our investment theses in three key areas that we believe would help us identify startups with a high potential for success:

  1. Exceptional student founders. We believe that founders who possess a set of qualities, connections, or have a unique “X-factor” differentiating them from other young founders are strong predictors of future success.
  2. The creation of products or services that have the potential to transform various aspects of Gen Z’s lifestyle. As digital natives, students and fresh graduates are primed to address the problems of the next generation. From campus superapps that may sprout into the next Biggest Thing Since Sliced Bread to products that change the way Gen Z youths interact and communicate, we wish to spot the startups that are spearheading these transformative solutions.
  3. Intellectual property from research labs in universities. According to Startup Genome’s report, Singapore ranks highly in both access to and the quality of STEM and life sciences talent. We believe there is a lot of amazing work going on in our local universities’ research labs that is often overlooked by commercial VC funds. We hope to support these intellectually curious student researchers in successfully commercialising their inventions.



Nonetheless, the student startup ecosystem in Singapore is still in its nascency. While there have been success stories — as highlighted above — a large number of student startups still lack investor-readiness. We highlight four key challenges encountered by student founders below.

Challenge #1: The startup’s marketing materials / pitch lacks a clear story

What problem is the startup trying to solve? How big is this problem? Why are the founders so motivated to solve it now? More importantly, what makes the founding team the best group of people to solve this problem? A great (bonus) item that founders can consider in their pitch is: Why are they pitching to this specific investor? What makes the fund or investor a good partner for the startup in its next phase of growth? While investors have their own answers to what value they are able to add to a startup, we do appreciate hearing the founders’ point of view on how we can help them; and assess if there is an alignment of goals and ‘fit’ between founders and investors.

Challenge #2: Incomplete core team

Many of the student-founded startups we have interacted with lack an all-rounded team, i.e. they have a “big-picture guy” (typically the CEO), and a “product guy” (the CTO). However, they sometimes overlook the importance of having a star “execution guy” dedicated to ensuring the operations of the startup are running smoothly. In most cases, we observe that CEOs try to undertake both strategy and execution duties at the startup, but they may lack the necessary experience or tend to over-stretch themselves, which could lead to burnout in the long-run, and impede the growth potential of the startup. Key capabilities that young startups lack in-house are related to finance / accounting, legal and even human resource management (management of staff benefits and company culture).

Challenge #3: Lack of focus on the financial viability of the business

Although many student-founded startups may be at the pre-revenue/ pre-commercialisation stage, potential investors still wish to understand a startup’s path to profitability, especially as the WeWork debacle dominates headlines. Many young student-founded startups lack proper financial projections and even key historical financial figures that provide interested investors with a better picture of the company.

Challenge #4: Inexperience in document preparation for data rooms

A data room contains a set of crucial documents — including, but not limited to, official shareholder agreements and capitalisation tables, proof of ownership of intellectual property, business plans, and key contracts — that potential investors would request of companies during an official due diligence process, but student founders may not have experience in preparing.

At Protégé Ventures, we believe that these challenges faced by student founders should not hinder them from achieving their growth and fundraising targets; we believe that these gaps present opportunities for pre-seed or seed investors like ourselves to work alongside founders in guiding them through these issues.



We believe that the student startup landscape is reaching an inflection point and we are excited for what is to come.

Over our two years of experience within the space, we believe that Singapore’s university startup ecosystem is vibrant and reaching an inflection point, as older success stories like Carousell and Ninja Van gain regional prominence and thrive, achieving valuations in the hundreds of millions. We also see younger startups increasingly able to raise money from investors and various other sources within a short period of time to accelerate the product enhancement/development process and commercialisation, and fuel ambitious expansion plans.

Our team has witnessed the gradual development of the local ecosystem as well as the astonishing growth of many of these student-founded startups within this short period of time. We have also been fortunate enough to be granted opportunities to participate in the rapid growth of some of these brilliant startups, and are incredibly excited to be part of the next phase of growth in the space in the years to come.



Contributing authors: