Talk to anyone in an Australian startup and almost all will be keen to remind you how the federal government is still dragging its feet when it comes to supporting the sector.
Back in May, founders were quick to label the federal budget a “joke” after it appeared the government had all but abandoned its “innovation agenda”, choosing instead to support traditional industries.
Fortunately, that hasn’t – so far – stopped Australia’s innovators from being determined to make things work for them here. It is, whichever capital city you choose, a fine place to live, after all.
And there’s been a lot of talk recently about Sydney’s rising status as a fintech startup hub. A recent KPMG report rated the city a “serious challenger” to Singapore in becoming Asia’s top destination for international talent in that field.
But to be a world class player, you need world class talent. And if you want to attract a critical mass of that talent, you need to offer it something that the competition doesn’t have. The reality is, lifestyle just isn’t enough.
Almost right on Australia’s doorstep is its biggest competition – Singapore. An HSBC report found that 87% of expats living in Singapore say it’s a good place to start a new business, much higher than the global average of 56%. 37,400 international companies have headquarters there; 7000 of them multinationals.
Its government, realising the potential for something huge to grow in Singapore’s startup space, is heavily investing in its future.
SPRING Singapore is an investment program dedicated to helping local startups scale into international markers. The EntrePass business visa allows entrepreneurs to relocate to Singapore before registering their company. And supportive hubs such as Block 71, a government experiment that aims to bring the startup community under one roof, are all part of the long-term strategy.
Unsurprisingly, Aussies have cottoned on, and are joining the migration.
So we caught up with five founders who have either escaped or expanded to Singapore for reasons ranging from cracking the Asian market to seeing leadership opportunities for women and taking advantage of excellent government initiatives.
Shootsta’s CEO Mike Pritchett recently moved to Singapore to oversee their first overseas expansion (to be followed by US and UK).
He says Singapore is the gateway to Asia and also the perfect next stepping stone for Aussie businesses looking to scale. Here’s Pritchett on one of the biggest differences he’s found:
They have an Asian focus, because the Asian market is so huge and diverse (India, China, Hong Kong, Japan etc). India is an entire world unto itself, so is China. Japan even more: in Japan you have to set everything up in (terms of the) culture of Japan.
Most founders/ businesses in Australia are Australia and New Zealand focused, and often, that’s as big as they think. The thinking in Australia is that Asia is almost too hard. In Singapore, they believe there is so much opportunity in Asia.
On how the Singapore government helps new businesses:
Singapore has been extremely helpful, and has made it easy for us to set up and do business here, as opposed to Australia, where regulations are much stricter.
The EDB (the Economic Development Board, a government department dedicated to helping start-ups and new businesses flourish in Singapore) will help you set up in Singapore. They have been very helpful in giving us an account manager, who is basically our advisor on the ground, and will help with anything regarding where to get an office, advise us about our legal and accounting obligations, connect us to other businesses, give us tax advice and more. This is something you just don’t have in Australia.
On expanding to Singapore before US and UK:
Asia is a massive opportunity. For us, it’s an easy stepping-stone from Australia. Australia to Singapore is not a hard step to conquer. Australia to US is a bit of a midfield; there is a lot of costs in setting up in US that are not as prohibitive in Singapore.
Former Airtasker COO and co-founder, Jonathan Lui
Lui went to Singapore to explore possibilities for his next venture, which he’s still working out.
On thinking global versus domestic:
In Singapore, start-ups are almost always thinking of a multi-country approach for their business, as they see Singapore as part of a wider ‘region’ (i.e APAC/SEA) rather than just a single country.
Singapore’s startup sector also attracts larger amounts of venture capital because of its proximity to the APAC region, which creates greater scope for growth. This is something that every business in Singapore has in mind.
On government assistance:
The government is very openly driving the innovation agenda in Singapore,and has been doing so for many years, both from a media perspective and a financial perspective. They’ve taken a very active role not only in supporting the industry with investments and supportive initiatives but also in kickstarting and driving strong participation from industry as well.
It’s well known that Singapore is a very pro-business environment and they’ve recognised that government has a very important role to play in building a thriving environment. We’re seeing this now play out at the federal and the state level in Australia which is a fantastic start (such as the recently announced Innovation Hub from Jobs for NSW), but we’re potentially playing catch up to other governments out there that have identified the role they wanted to play much earlier.
It would be great to see the Australian government not only providing supporting initiatives directly to the startups themselves (affordable work spaces, R&D tax incentives), but also helping to accelerate partnerships and investments between industry and disruptive startups.
The Dream Collective
The Dream Collective, a global corporate leadership training platform founded by Aussie entrepreneur, Sarah Liu, is gearing up to move to Singapore and Tokyo.
The company was founded in 2012 after Liu was confronted by the lack of leadership development opportunities for young women in the workplace. She’s now looking to expand into regions that are actively seeking way to foster female empowerment in the corporate landscape, and Singapore is on the list:
We want to expand our sphere of influence so that we are impacting the lives of female frontline leaders both nationally and globally. Unlike other APAC regions such as Tokyo, Singapore is progressive and starting to address important issues such as the gender pay gap, females in senior leadership positions and the economic gains of fostering the development of female leaders.”
This is promising to see, but there is still a lot of work to be done. A 2016 survey by Grant Thornton revealed that companies in the Asia Pacific region were making slow progress around growing women into senior roles. The findings showed that in Singapore, the number of women in senior management only increased by 3 per cent between 2015 and 2016. So unlike Australia, there is currently a gap in the market when it comes to building up emerging female talent in the workplace. There needs to be a greater focus and more investment and development opportunities for women at the early-mid career level.
Our conversations with executives in Singapore to date reveal a commitment to fill the gap in the market, so the wheels are in motion and we are hard at work understanding how to localise our Emerging Leader’s Program in different regions to ensure we make the greatest impact possible.
Rob Hango Zada is the co-founder of Shippit, a software platform that allows businesses to manage the whole end-to-end shipping process. Shippit manages over 250,000 parcel deliveries each month and recently secured $2.2 million in Series A from APAC/Singapore VC Aura Group, knocking back a $5 million offer from other investors, including Australian VCs.
So why Singapore/APAC?
The market presents a lucrative opportunity for the business as one of the world’s fastest-growing regions for e-commerce revenue, poised to be worth US$25 billion by 2020 (according to Frost and Sullivan).
APAC is a strategic focus market for us, the rise of eCommerce in Asia has advanced at varying rates across the region with South-East Asia just starting to ramp up. Given the latent market opportunity and the benefit of Australia’s proximity to the region, this places us at a unique vantage point to go after the opportunity. Historically, Aussie businesses have set their sights on a North America or European launch as a marker for success, placing significant operational and monetary strain on a growing startup as market conditions are inherently tougher.
Australian VCs didn’t demonstrate the willingness to back the global opportunity we are addressing in the same way an APAC-based VC did – hence we chose to align ourselves with a partner that can both guide us on market entry and also help us establish the right relationships in the region.
Signing Aura [Group] as our lead investor was a strategic decision for Shippit. Their strong presence and networks throughout APAC puts us in good stead to launch into the region as we aim to make our software available to retailers across the globe.
Australia’s leading online mortgage marketplace is planning to expand internationally by late 2018, and Singapore is one of the markets it’s considering for a number of reasons.
Mandeep Sodhi, CEO and co-founder of HashChing, said:
The demand for a solution like HashChing is strong, with the latest data from Credit Bureau Singapore showing mortgage loan applications were up by 20 per cent in the first quarter of the year alone compared to the previous three months.
The banking landscape is also quite similar to Australia, where three major banks have more than 80 per cent of the market share, and it takes 2-3 months to apply for a home loan. This means the Singaporean mortgage market is ripe for disruption, and the HashChing solution will be able to address many of the pain points of borrowers in that region, much as it has done in Australia.
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