Startup Hub Singapore Working with Japan to Attract Japanese Entrepreneurs; Both Countries Aim to Develop Unicorns

By Takashi Itoda / Yomiuri Shimbun Correspondent

6:00 JST, August 26, 2024

SINGAPORE — Singapore is increasing its status as a startup hub by attracting startup companies from various countries and regions and backing their growth, instead of simply providing funding. The governments of Japan and Singapore have begun working together to encourage Japanese startups to expand overseas.

Red Dot Drone PTE, Ltd., a company that develops software that controls automated drone flights, has been based at Block71, a startup support center at the National University of Singapore, since its founding in 2017. The firm has about 10 employees, with Thai and Singaporeans as well as Japanese, according to company co-founder Akira Hirakawa, 41.

Block71 brings together managers from about 30 companies working on software development for customer management systems, among other purposes. The managers are of various nationalities, including Australian, Chinese and Malaysian.

“It’s stimulating as we can exchange information on clients and investors, so I often get tips for my business from discussions with others,” Hirakawa said.

Many startup companies have achieved growth in Singapore. Grab, the developer of an app that provides both ride-hailing and food delivery services, is a typical example. Entrepreneurs from home and abroad are clustering together in the country. According to the Singaporean government, startups raised $11 billion (about ¥1.74 trillion) in the country in 2022, exceeding the estimated ¥800 billion raised in Japan.

Behind the success of the startups is the Singaporean government’s measures to actively promote entrepreneurship. The government provides subsidies of up to 50,000 Singapore dollars, or about ¥5.9 million, to entrepreneurs and provides offices that can be rented at a low price. It has also introduced visas for foreign entrepreneurs and offers tax incentives for investment in newly established startups.

In April, the Japanese and Singaporean governments agreed to establish a platform for the two countries to collaborate in supporting startups in order to accelerate the expansion of Japanese startups. By making use of Singapore’s expertise, the platform will facilitate opportunities for entrepreneurs to meet with investors and help them expand overseas through investment firms affiliated with the Singaporean government. The two governments aim to develop unicorn startups, or companies with a corporate value of at least $1 billion, or about ¥160 billion.

Singapore’s Minister for Manpower and Second Minister for Trade and Industry Tan See Leng has high hopes for attracting Japanese startups, saying, “Singapore and Japan are natural partners to collaborate on deep tech and open innovation.”