Singapore startups pivot to deep tech as funding tightens

Founders must show stronger unit economics and clear expansion strategies.

Singapore’s startup economy is poised for modest growth this year as founders pivot toward deep-tech innovations, particularly in artificial intelligence (AI) and robotics.

“We foresee not a broad bull market, but a strong environment for high-quality startups with clear ASEAN (Association of Southeast Asian Nations) expansion pathways,” Mike Maté, a general partner at Kickstart Ventures, Inc., told Singapore Business Review.

The cautious outlook follows a strong 2025. Singapore, home to more than 48,000 startups, climbed to fourth place globally from fifth a year earlier, according to StartupBlink Ltd.’s Global Startup Ecosystem Index.

Data from Kickstart Ventures’ January report showed equity funding in Singapore rose 35% to $5.4b (US$4.2b) in 2025, with fintech leading at $1.3b (US$1b).

Maté noted that whilst the ecosystem’s value remains resilient at $184.7b (US$144b), investors have become more selective.

Founders must now show stronger unit economics, clear regional expansion strategies, or category-defining products.

Nick Cocks, a partner at Velocity Ventures Pte. Ltd., said the shift reflects a more disciplined funding environment.

“A lot of funds are sitting on investments that are underperforming,” he said via Zoom. “That’s what caused the so-called funding winter over the last 18 months. But we’re starting to see funds deploy more rationally.”

Whilst fintech led deal activity, health technology had the strongest rebound, signalling renewed investor interest in regulated, high-impact sectors, Maté said.

Kickstart Ventures reported that health tech raised $413.44m (US$323m) in 2025. Ultragreen.ai Ltd. reached unicorn status after raising $240.64m (US$188m) in a pre-maiden round that valued the company at $1.664b (US$1.3b).

Herston Elton Powers, founding managing partner at 1982 Ventures Pte. Ltd., said founders are entering the market more prepared and globally focused.

Many are building for multiple markets from the outset rather than expanding later, he said in an emailed reply to questions.

Zen Liew, investment director for Singapore at Gobi Partners Venture Capital, said investors are prioritising sustainable business models over rapid expansion.

“There is a shift towards deeper technology, business-to-business startups, particularly in AI, fintech, infrastructure, and enterprise,” he said in a separate Zoom interview.

Sun Sun Lim, vice president for partnerships and engagement at Singapore Management University, said the ecosystem is becoming more science-driven, supported by stronger investment in research and development. 

“This creates that ecosystem with scientific innovations, with scientific talent,” she said via Zoom, adding that there’s a growing appetite for “defensible” technologies that address structural challenges across the region.

Analysts see AI, sustainability, and health tech as key sectors in 2026.

“AI infrastructure, climate tech, and digital health are the three sectors most likely to see accelerated funding,” Maté said, citing strong adoption and regional scalability.

Liew also pointed to growing interest in robotics, advanced materials, and semiconductors, partly driven by firms shifting operations to Southeast Asia amidst US-China trade tensions.

In travel and hospitality, Cocks said robotics could play a bigger role as companies adopt labour-saving technologies in manpower-intensive settings such as hotels and airports.

US$1 = S$1.28