Behind SEA’s venture-building boom in a bear market

In November 2022, the Singapore branch of Entrepreneur First (EF) pulled out of the city-state, citing a lack of deeptech talent in Southeast Asia. The Singapore portfolio had yielded US$1 billion for the UK-based startup generator.

Image credit: Timmy Loen

An entrepreneur who was part of the venture builder’s earlier batches says EF was trying to get 50 to 100 participants in its 12th cohort, but by that time, it had already “exhausted all the good founders in a tiny country.”

This source isn’t alone in his sentiments. “There simply weren’t enough skilled people to support and fuel new startups, with top talent being snatched up by big players,” says Julian Tan, founder of recruitment portal FastJobs.

Tan, who formerly headed Singapore Press Holdings’ venture-building unit, attributes this to the speed at which the country’s tech industry has grown in recent years and how corporates are stepping up their digital transformation.

But Rainmaking’s Sam Hall says there’s no lack of talent in the region, adding that corporates are also envisioning growth in Southeast Asia from the lens of venture studios.

Lufthansa Innovation Hub managing director Christine Wang seems to agree.

“Southeast Asia is picking up venture building now, especially in Singapore. The region is at the beginning of the maturity curve,” she says.

Christine Wang / Photo credit: Lufthansa Innovation Hub

The timing is significant: Venture builders that came up around economically troubled times, such as the Great Recession from 2007 to 2009, have a higher survival rate than other cohorts.

Safer bets during a downturn?

The term “venture builder” is often used interchangeably with incubator and accelerator. But by its very nature, venture builders create their own portfolio of companies, handling the ideation, product development, and talent acquisition of each project.

While venture builders need to split their focus across multiple ventures to avoid putting their efforts at risk, this also works to their advantage.

By developing multiple products at the same time, companies also “build up domain expertise and knowledge of building the space,” Shaun Heng, venture partner at Hustle Fund, tells Tech in Asia.

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