Singapore’s VCs lament Entrepreneur First’s exit

Managing partners from Cocoon Capital and 500 Global have expressed their disappointment in Entrepreneur First’s (EF) departure from Singapore and touched on possible reasons for the deeptech investor’s decision.

Photo credit: The Unreasonable Podcast

EF announced its exit in November to focus on programs in Europe, North America, and India instead. According to a report from the Business Times, EF saw a lack of deep tech talent in Singapore to support its growth targets.

Michael Blakey, managing partner at Cocoon Capital Partners, said during a segment of a recent Unreasonable Podcast episode – moderated by Openspace Ventures’ Hian Goh – that he saw the reasoning, as reported by the Business Times, as “a bit of a slap in the face.”

Blakey was one of the first investors in EF when it first started in the UK, he said. He also helped EF move into Singapore, handling initial introductions for the investment firm.

The investor said he’s backed five of EF’s portfolio firms, some of which have been “top-performing companies.”

Vishal Harnal, global managing partner at 500 Global, also said on the podcast that he’d seen successful investments into EF-backed companies, such as Transcelestial, that have closed subsequent funding rounds.

When he saw the Business Times report, Harnal said he was “really shocked and a little bit upset” and said that there is talent in Singapore to invest in.

Deep issues?

On the podcast, Harnal acknowledged that there is a relatively shallower deeptech talent pool in Singapore compared to the UK and the US. According to him, the latter markets can draw in experts from western research institutes and tech institutes.

“So maybe that the quality of the founders and the follow-up founding team does exist, and there’s enough people starting companies, but then scaling those companies is an issue with the right talent,” he said.

Blakey had a similar view, saying that importing talent was tough for newer companies. “Yes, you can get them in, but you have to pay them so much that as a startup, we can’t afford to pay them,” he said.

However, Blakey also found that it was “counterproductive” for EF to leave Singapore – where it has already built a portfolio of 80 companies. “[EF] started off with at least a 10% stake in those businesses. So if they get diluted, they will probably still have at least 5% of that within a short period of time.”

“You should stay if you have a US$1 billion portfolio,” Goh said during the podcast episode.

When pressed for comments on the podcast episode, EF’s co-founder and CEO Matt Clifford told Tech in Asia that the situation is a “non-story.”

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