S’pore firms obtained $5.45 billion from venture capital in the first 9 months of 2024, despite the decline

Mr. Murli Ravi, co-founder of Tin Men Capital, offered another perspective.

He said many investors active during the venture capital boom between 2021 and 2022 were either not based in Singapore or lacked venture capital expertise. After the environment changed, they quietly exited the scene, resulting in a decline in startup activity.

“What is urgently needed is for the Government, government-affiliated companies and large local investors, including family offices, to support our own start-ups, rather than mostly funneling capital to other markets or waiting for foreign funds to plug into Singapore.” in question.

Observers told The Straits Times that venture capital activity is expected to pick up in the coming months due to expected interest rate cuts by the US Federal Reserve. Other factors, such as geopolitical developments, may also come into play.

Mr. Bryan Oh, CEO and co-founder of local battery recycling company Neu Battery Materials, believes the availability of financing is starting to improve as more investors renew their interest in startups.

“I expect we will start to see more investment over the next few years as interest rates fall and dry capital increases,” he said.

Ms Tan Kaixin, managing director of Enterprise Singapore’s investment arm Seeds Capital, said overall investment activity in Singapore is expected to begin to pick up as 2025 progresses, with falling US interest rates starting to take effect and fund managers, particularly those raising capital in 2025, are expected to recover. The outbreak of the Covid-19 pandemic increased capital distributions.

“Overall, Singapore remains an attractive destination for accessing new intellectual property, developing commercially viable new companies and testing solutions before expanding into markets,” he said.

“There is still dry powder in the region, characterized by a growing pool of global venture capital funds setting up offices in Singapore.”

Mr Chua Kee Lock, managing director of Temasek-backed venture capital firm Vertex Holdings, said expected interest rate cuts could pose a headwind for venture activity but a more nuanced recovery environment should be expected.

“Ongoing geopolitical tension, from conflicts to trade dynamics, can create uncertainty and impact investment flows regardless of the exchange rate environment,” he said.

“Trade disputes between the US and China continue to reshape global supply chains and investment patterns, especially in semiconductors and technology.”

Mr Chua noted that the outcome of the US elections could have certain impacts on global markets and the technology industry.

“Policy changes, trade relations and regulatory environments may affect investment flows. “We have observed that technological innovations and market opportunities often transcend these political cycles,” he said.