No one can leave out Singapore when discussing Southeast Asia (SEA) on any important topic. The city-state is the most developed place in the SEA region and is filled with opportunities. The city is not big – its area would fill four JFK airports – but it is the home to big enterprises in the finance sector, including DBS, Temasek, and so on.

Overview of Singapore’s PE/VC market

Pushed by finance companies, frequent investment activities are ongoing in this city. Capital flows to where it is needed, inbound or outbound. For domestic investment, Singapore shares a similar story with the rest of Asia – 2019 was a slow year for all. Before 2017, the performance of the PE/VC market in Singapore kept a constant pace: deal counts in each year were similar from year to year and the annual total deal value did not fluctuate.

Nevertheless, the deal size started to rollercoaster from the beginning of 2017 and reached a peak in the first half of 2018. The Alibaba-owned e-commerce company Lazada contributed significantly to the market performance since it pumped up the deal size in 2017-2018 by raising billions of dollars from its parent company. Mega financing fund inflated the average deal size in the same period.

The second half of 2019 saw the least average deal size since 2014 but the most deal counts overall. As late-stage investments are generally bigger in volume than early-stage ones, we can assume that the second half of 2019 was clustered by a much higher percentage of early-stage investments.

Singapore enterprise services’ private sector

While the overall statistics depict investment frenzy in 2017 and 2018, so did the investment picture in the enterprise services field reflect a rise in confidence. The number of financing rounds ramped up by 50% and were mostly seed or angel investments. However, the story of this sector went in an opposite direction in 2019 compared to the general trend.

‘Fewer deals were made but more money raised’ – this is the typical phenomenon of the enterprise services VC market. The weight of financing rounds shifted from seed and angel investments towards Series A financings. Massive early-stage financing activities mark Singapore as an ideal place to start up a business.

An international environment, open climate, favorable talent policies, well-established education system, high penetration of the Internet – all these reasons explain why a company, or to be more specific, an enterprise services company would choose the city. Breaking down investments over the past five years, the CAGR of deal count presented the largest growth in Series A and the largest portion of seed and angel investments signals that startups are growing here.

As a city and a country, Singapore has its limits. Due to the size of the state and the population, the market ceiling restrains companies from growing big if they only set their eyes on the domestic market, one with less than 6 million individuals. The physical disadvantage pushes Singapore to be more open to the world – this is where the larger prize is. For smaller countries, the chances of having a global enterprise are higher than for bigger countries – think of Samsung for South Korea and Sony for Japan.

Challenging Malacca, Singapore is a business center in SEA. The region is fragmented with thousands of islands scattered around the equator. In the past, trade activities were the only means to reach other parts of the world and to expand business worldwide. But in the digital era, the Internet has extended the boundaries of the imagination in reality and the virtual world – enterprise services are surfing on the tip of the Internet wave.

In the enterprise services sector, we discovered that the twenty most-funded firms have over a quarter being tagged by artificial intelligence (AI). We analyze these companies by using their feature tags. ‘Data / Analytics’ is largely composed of AI companies that provide AI-featured SaaS services, while ‘Software / Applications’ includes various types of both general use and professional use (specific industry/occupation) but are not related to data processing or analytics.

Before the dot-com heat, enterprise services did not imply any concepts like Software-as-a-Service (SaaS), Platform-as-a-Service (PaaS) or Infrastructure-as-a-Service (IaaS) as the core and fundamental cloud service had yet to be constructed at the time. Along with the prevalence of the cloud in the past decade, IaaS providers like AWS, Azure and Alibaba Cloud have prepared the foundation for PaaS and SaaS providers to operate their businesses – hence the enterprise services have been given new definitions for the time being.

The infrastructure work boosted the development of enterprise services as a subset of enterprise services. IaaS providers’ expansion activities in SEA yield the opportunity for local enterprise services startups. With an open business environment, international financiers and well-educated talents, Singapore has made itself the best garden city for these tech-savvy enterprise services startups to bloom.