It seems every couple of weeks there’s a new story about Singapore trying to put itself on the tech map, whether in the private or public sector, with startup programs or recruitment drives from the government. In the next move for the small city-state, investment firm Marvelstone is opening a new “fintech hub” in the city to foster innovations in this space.
It claims that it will be the largest of its kind in the world. Dubbed Lattice80, the 30,000 square foot facility will be located in the hustle and bustle of the city’s downtown central business district. The investment group says that the initiative will be not-for-profit but did not respond to queries regarding investments in the start-ups that participate.
The hub fits into the Singaporean government’s Smart Nation initiative, a bold program for connecting all aspects of the city and its citizens through technology. It’s also unclear how much involvement and funding from the state there is in Lattice80.
Marvelstone says that it has been in discussions with the Monetary Authority of Singapore (MAS) and will collaborate with similar programs from other continents including Level 39 from London and The Floor from Israel.
MAS has launched the Smart Financial Centre, a US$225 million scheme to support fintech development. Marvelstone explains that Singapore is well-placed to be a centrepiece for fintech in Asia thanks to this sort of welcoming regulatory environment, the country’s close proximity to investor networks, and general enthusiasm from policymakers towards technology.
And there’s been recent evidence of this. PayPal launched a fintech innovation lab in Singapore this summer (its first outside the US) and it has very similar goals to Lattice80 to support fintech start-ups in Singapore and around Asia. PayPal is also working with the National University of Singapore (NUS), which happens to be one of the cornerstone bodies involved in Smart Nation. This will make the competition to secure hungry entrepreneurs with good ideas even tougher.
Despite all its efforts, Singapore has yet to produce a world-beater company. It has some success stories of course, like Grab (founded by Malaysian Anthony Tan but based in Singapore) and it has become true competition for Uber in South East Asia. It’s also partnering with self-driving start-up Nutonomy, which already has cars in advanced testing stages on the road.
But on the fintech scene, things are little quieter. “Funding is more of a challenge for fintech companies,” explains Tanmai Sharma, CEO of Mesitis, a platform for managing private wealth, there is still interest from investors in the space but it lacks the sort of proven method that other sectors have.
“I suspect funding will become much easier once fintech has its own ‘poster child’, if I can use that word.”
Fintech companies in Singapore are still raising founding rounds though, and without the aid of government backing, such as Fastacash. This social payments start-up has raised over $23 million in venture funding to date, mostly from local firms, and this year it partnered with Hungarian payments company Cellum to facilitate a greater push across Asia and into Europe and North America for both sides. The start-up remains headquartered in Singapore but said it will be opening sister offices globally.
HedgeSPA, a predictive analytics platform for hedge funds, made the decision to open a California office to get closer to the US market but it remains headquartered in Singapore. Then you have companies like ShereIt that have not raised any significant rounds yet but are trying to find their footing.
Singapore provides a potent mix of market, infrastructure, people, and investors, according to Sharma with high internet speeds and good quality of life.
“It is also relatively easy to hire people in Singapore, especially those with some banking background,” he says.
“The only missing piece is developers for which our solution is to hire them offshore and let them work from wherever they are, all our staff except the developers are Singapore based.”
Singapore, like many regions, has suffered from a skills shortage in certain disciplines and has attempted to address it by luring more foreign skilled workers into the city.
The MAS has looked far beyond its borders for help and collaboration too. In September it signed an agreement with its equivalent in Switzerland as a means to share regulatory data and fintech market trends.
In November, Singapore will host the Singapore Fintech Festival, a conference espousing the growing industry and will connect start-ups with investors. The US Commercial Service, a government agency that helps companies export, is planning to send a delegation of start-ups to the event to build bridges with the local ecosystem.
Singapore seems to be slightly ahead of the curve but it isn’t alone in trying to prepare the ground for fintech. Hong Kong fancies itself as another potential hub for the burgeoning industry with attractive regulations as well as Accenture’s own fintech program, which has seen some Singaporeans jump ship, while further afield London and Australia are trying to become go-to fintech destinations. Singapore is on to something but it’s still got a ways to go.