Singapore - Best Gateway to Investing in Asia
Amra Naidoo, Co-founder & General Partner at Accelerating Asia
Amra Naidoo, Co-founder & General Partner at Accelerating Asia
Twenty years ago, the tech world was unipolar. Nearly all of the major innovations in the space revolved around Silicon Valley and other American companies. Now things have changed. There are startup hotbeds distributed widely across the Asia Pacific, including China, India, Japan, and Australia, among many others.
In this kind of environment, the question for business leaders is not whether they should get involved in the Asia Pacific, but how. This challenge is one that investors have long wrestled with. A common answer is Hong Kong, which is called to act as a gateway to Asia due to its roots as a British territory and its lively startup scene.
While Hong Kong indeed has a rich history in tech innovation, the better access point to the rest of Asia’s markets has arguably shifted to its southwest. Even as a tiny country in Southeast Asia, Singapore has somehow become the de facto hub for investors who want to begin investing in the region.
Many journalists, analysts, and practitioners have written about the strengths of Singapore as a jumping-off point – a diving board - into the rest of Asia. Common reasons they cite include the ease of doing business, education and experience of the workforce, and the overall quality of life that the city can provide founders – if they must grind as an early stage founder, after all, why not elect to do so in a country as developed as Singapore?
There is one element, however, that I believe is frequently overlooked in this discussion. As the co-founder of Accelerating Asia, an early-stage VC accelerator headquartered out of Singapore that invests in startups across East Asia, Southeast Asia, South Asia, and Oceania, I’ve had the privilege of seeing how startups best grow, and in turn, what attracts investors from all over the world to our proverbial doorstep.
Let me explain by way of analogy. Shows, movies, and other media frequently portray tech entrepreneurs as inspired inventors: They get a eureka moment for a product, build it in their garage, and then launch it to thunderous acclaim. Such common romanticization gets some parts right and others wrong.
While some entrepreneurs indeed do get ideas seemingly out of thin air, the building and scaling process never works this way.
Even the most talented engineer-entrepreneur cannot create in a vacuum. For him to succeed, the founder needs additional feedback, advice, and input, which most efficiently occurs via knowledge transfer from someone who has already been in their shoes, like a successful serial entrepreneur.
This idea may seem like a no-brainer, but it accounts for why very new startup ecosystems take so long to reach lift-off speed (that is, without experienced experts capable of knowledge transfer, it’s tantamount to the blind leading the blind), and other ecosystems seem to have enormous momentum, producing unicorn after unicorn almost like a flywheel.
This idea also accounts for why Singapore is the best hub for investing in Asia. Far greater than even its economic, social, or other resources, Singapore has one of the richest knowledge bases in tech entrepreneurship. There have been thousands of entrepreneurs who have successfully built businesses out of Singapore and in the region who choose to call the country their home or their second home.
Singapore’s ascendance as a hotspot for entrepreneurs is partly due to its good governance, which may not be the most exciting attribute but it’s one of the most critical. Through good governance, Singapore has made it easy for founders to set up their businesses in the country. This ease of doing business has proven to be a great equalizer, shoring up the nation’s weaknesses in other areas, such as its high cost of living.
Far greater than even its economic, social, or other resources, Singapore has one of the richest knowledge bases in tech entrepreneurship.
These founders act as mentors in a variety of settings, giving feedback at pitching competitions, acting as sounding boards at networking events, and coaching as advisors or investors. At Accelerating Asia, we experience this first-hand. Many of the angel investors of our startups are exited founders, as are some of the facilitators for our master classes, such as one founder, who started a Fintech startup that he eventually sold to a larger Fintech company. We even have some investors who started as co-founders at top startups, before forming this loose network of angel investors as a so-called “mafia” (we even had one founder who went through Accelerating Asia’s flagship program and later backed the fund as an investor).
This knowledge transfer should not be underestimated. By providing tactical or strategic advice when it comes to building a startup, these experienced leaders shortcut their younger counterpart’s path to success. These upstart founders will be spared of making costly mistakes - be it in product development, user acquisition, company building, or some other critical function - allowing them to reach scale or even market leadership that much quicker.
This mentorship is not a one-time process - it creates a virtuous cycle. This next generation of successful founders will, in turn, accelerate the learning of those who come after them, and so on, deepening Singapore’s lead over other markets in Asia as the nation with the deepest bench in tech entrepreneurship.
The value proposition for investors is clear. If you want to back founders who have access to the knowledge capital they need, Singapore should be your go-to place. Your founders will get the expertise they need to scale their products across the region and indeed the world, just like their mentors, coaches, and advisors before them. Singapore, in short, is where Asia begins for investors and entrepreneurs who want the best chance of being coached to the finish line.
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