Singapore's startup ecosystem is braving its first crisis

SINGAPORE'S startup ecosystem is arguably no more than a decade old, with the country's efforts to nurture tech entrepreneurship commencing around 2010.

Since then, startups in the Republic have enjoyed a promising environment, marked by generous government support in the form of grants or rental waivers, and strong interest from global investors seeking a launchpad into the exciting region of South-east Asia. 

In 2020 however, this youthful lot of companies would encounter their first challenge. The Covid-19 pandemic, which has relentlessly struck businesses everywhere and forced the hand of many, did not spare startups either. 

According to VentureBeat, 41 per cent of startups globally were struggling with a cash runway of three months or less through March and April this year. In Singapore, startups lamented a slowdown in fundraising activity and the loss of business development opportunities.

These young companies - having no prior exposure to any such disaster and many among them led by first-time entrepreneurs - were abruptly struck with a weighty challenge: Just how do they wrap their heads around something this big – and new?

In a heartening sign, Singapore's startup community responded to the coronavirus agilely, bullishly and unitedly, a manner perhaps less observed in other sectors. For a first encounter, many of these startups resiliently rose to the challenge - either spying opportunities and transforming business models to stay atop the crisis, or electing to be socially conscious and cater to the needs of those affected by the outbreak.

The more agile of startups undertook a strategy review and ventured into areas they never thought sensible before, like The Chope Group with food delivery. 

A restaurant reservation and dining deals platform, Chope faced the challenge to explore and steer in a different direction after the Singapore government announced that dining-in would be prohibited as part of efforts to curb the spread of the coronavirus. The company knew it had to switch gears. 

Within a couple of days, Chope leveraged its database of close to 5,000 restaurants across markets and millions of hungry food aficionados to foray into food delivery, a fast-growing and much-needed service during this time. 

To-date, it has amassed over 240 restaurants for its food delivery service, and works with transport partners including SMRT and Gojek to deliver meals to customers islandwide. 

Startups also shifted their focus to social responsibility and supporting local communities, utilising their products and resources for something more than just their own bottom lines. 

Fintech firm MatchMove, for instance, is working with KPMG to provide the nearly 1,000 employees of Expand Group, one of the largest construction firms in Singapore, to enable these migrant workers to directly remit salaries from the payroll. 

This saves workers the need to stand in line on their days off to conduct remittance services. To boot, KPMG spearheaded this digital solution with MatchMove, and has donated cash to pre-load the wallet with a sum to cover transaction fees for this pilot phase.

A third trend is the rise in community initiatives within the startup ecosystem. Galvanised by the shared crisis, these have largely been organised by startups to lend a hand to other startups. 

Take Mentor for Hope, a programme where veteran startup practitioners provide mentorship to founders affected by the Covid-19 crisis, and simultaneously raise funds for charity. Interested entrepreneurs sign up and indicate their preferred mentors, and then receive instructions on how to make or raise at least S$50 in donation. 

In return for nearly 800 hours of mentorship, Mentor for Hope targets to raise the equivalent of 50,000 meals, which will be distributed to beneficiaries of Beyond Social Services and Willing Hearts Soup Kitchen.

In another example, the Action Community for Entrepreneurship, in collaboration with Enterprise Singapore, expeditiously put together a webpage of useful resources for startups to navigate the pandemic, ranging from private and public assistance schemes to pro-bono networks. 

This collaborative spirit is characteristic of the startup community. Much like it takes a village to raise a child, it takes an ecosystem to nurture a startup. The nature of entrepreneurship is that founders require communities to champion their innovation and risk-taking, back their endeavours, and integrate them into economics. 

A myriad of parties - such as companies, customers, partners, governments, employees and investors - all contribute to entrepreneurial success. 

In fact, it is this quality of cooperation and internal empowerment that has enabled Singapore's startup ecosystem to not buckle under the pressure of Covid-19. Two or three years ago, the ecosystem might not have been sophisticated enough to manage a crisis of this magnitude. 

Today, the ecosystem comprises distinguished organisations - both public and private - and a diverse, competent talent pool. All of these players have played a part in the swift, bold and charitable responses to the pandemic. 

It remains to be seen what the longer-term impact of Covid-19 will be on Singapore's startup ecosystem. Has the crisis cultivated tougher and bolder individuals out of founders? Will startups be better prepared to deal with the next calamity? More broadly, will the nice community initiatives carry on even after the pandemic has passed? 

Regardless, Singapore startups should take heart in the fact that they are braving their first crisis, and from observation, they are coming through. 

Anu Gupta is director of startups and global markets at Asia PR Werkz. The Chope Group and MatchMove are clients of Asia PR Werkz.