Launching a startup at a time when so many businesses in Singapore are struggling to stay afloat, probably isn’t the brightest idea. But a quick look at how startups are navigating the economic effects of Covid-19 just might make aspiring-but-hesitant entrepreneurs change their minds.
In spite of having wreaked havoc on the financials of enterprises of every size, the pandemic has undeniably opened many doors for the enterprising, not the least of which are homegrown startups in several different verticals.
Vulcan Post has singled out so-called “cloud kitchens,” local food production, self-driving cars and telemedicine as industries that have seen significant growth and innovation in the current situation.
Examples of startups that continue to flourish in these industries cited by CNBC include agritech company Sustenir, which grows non-native produce in urban vertical farms. Likewise cited were online shopping app ShopBack, which encouraged more businesses to offer their products and services online, and alternative internet connectivity company Transcelestial.
While these companies had the advantage of laying their foundations before the virus outbreak, there have also been promising startups that emerged during the pandemic itself. Venture capital firm Antler has spotlighted several startups in SaaS, fintech, agritech, regtech and more, which took off after January 2020 and have shown no signs of slowing down since.
Among these indomitable companies were pet tech company Pawjourr; fintech companies YourRent, Volopay and Moneko; B2B ecosystem management firm VikRee; and social e-sports platform Skibre.
Encouraging Emerging Enterprises
In recognition of the vital role played by startups in revitalising the nation’s economy, the Government has continually shown support for these hotbeds of innovation through various initiatives such as the Special Situation Fund for Startups or SSFS.
The fund provides SGD285 million in financial support for early or late-stage startups focused on food security and other “national priorities”. Other SSFS-supported priorities include food manufacturing and services, logistics, and other industries that create good jobs for Singaporeans. The fund will be made available until October next year.
Deputy Prime Minister Heng Swee Keat will also be enhancing the Startup SG Founder programme, which sets aside up to SGD150 million for helping startups grow during this time. Under the programme, first-time startup founders receive mentorship and a grant of SGD30,000 as capital.
The Government has also earmarked SGD300 million for the Startup SG Equity co-investment scheme, specifically for tech startups with significant potential on the world market as well as intellectual property.
And if the backing of firms like Antler are any indication, startups continue to enjoy strong support from the private sector, as well. The Nikkei Asian Review reports on how investments in startups in Southeast Asia as a whole have spiked despite the pandemic—referring to data from Singapore-based startup information platform DealStreet Asia.
Where ride-hailing startups Grab and Gojek raised about 70% of the region’s total investments in the first quarter of this year, e-commerce, logistics and fintech led the region in total investments during the latest quarter. Local startups that were able to secure significant investments during the pandemic include Ninja Van, RWDC Industries and Cleantech Solar.
The Road Ahead
Investors, however, say that they expect purse strings to be drawn a little tighter as the effects of the coronavirus crisis continue to linger. While businesses in general do face an uphill battle created by Covid-19, this slowdown on investments is one of several challenges that startups in particular will have to face in the near future.
Other issues facing startups in the new normal as described by law firm Bird & Bird include possibly lower valuations of their enterprises during the rise in M&A activity amongst larger companies divesting assets at this time. While this might be a boon to startups with cashflow problems, it might also mean less-than-ideal settlements.
Startups may also have to keep a closer watch on their overall operations— particularly when it comes to expenditure, marketing, fundraising and making sales forecasts—but this can only benefit their businesses in the long run. Singaporean startups will also have to take extra care with debt restructuring to make sure they don’t ultimately go under like Smartly.
Go-getters who refuse to let the virus get in the way of their startup goals would therefore do well to listen to business mentors who have been working with startups before and after the pandemic began.
Antler founder and CEO Magnus Grimeland is one such mentor. In a Startup SG feature, Grimeland advises startups to continue to seek funding and reach out to investors, and to empathise more with their teams, customers and stakeholders. This can be done by choosing one product or service to focus on, and working on revenue-generating activities for the meantime.
Aspiring startup founders may likewise take their cue from kindred spirits such as the founders of Antler-funded startups, who advise their fellow entrepreneurs to:
- Hone their digital communication and relationship-building skills
- Make creative use of available technology
- Revisit their business and marketing strategies
- Be flexible with their business plans
- Operate as lean as possible to make every dollar count
- Constantly check up on their teams to make sure they stay committed
- Work more closely with customers, and guide them through the uncertainties
- Find ways to work with talent usually engaged by bigger companies at other times
In support of the unshakeable determination of new business owners with big dreams of having startups of their own, SMU Academy offers the Advanced Certificate in Entrepreneurship: Building Your First Startup. The programme provides step-by-step guidance with a structured approach to risk-taking, particularly in the present business climate.
Modules cover the processes of conceptualisation and identifying the right opportunities; idea validation and prototyping; and testing and iteration. Programme participants will also learn how to pitch their ideas to investors and customers, and find different sources of funding, including Government grants.
Guiding participants will be successful startup founders, including Ivan Chang, Executive Chairman of offshore software development company Wonder Group; Denise Lim, serial entrepreneur and Senior Manager of the SMU Institute of Innovation & Entrepreneurship; and Clement Tay, Mendaki Mentoring Circle Mentor.
Click or tap here to learn more about the certificate programme and how your startup could play a pivotal role in the country’s economic recovery.
