Entrepreneur

Looking Back At S'pore's Tech And Startup Scene In 2019: Who Won, Who Lost, What Matters?

2019 has been an interesting year to say the least — it saw the rise and fall of many notable companies, and there were plenty of groundbreaking news that shook the tech and business scene.

With the year coming to an end, it’s only apt for us to reflect on what has happened so far. Let’s take a look at some landmark events that shaped Singapore’s digital and startup scene over the year.

1. Rise Of Category Leaders

carousell founders
Carousell co-founders / Image Credit: Carousell

One of the biggest news this year is definitely the news of Carousell acquiring Philippines classified leader OLX, which subsequently merged with 701Search.

The two transactions resulted in Carousell reaching a US$850 million (S$1.16 billion) valuation, crowning the brand as the category leader in Southeast Asia’s classified space. 

Other than Carousell, we have also seen the emergence of potential new category leaders in the region.

For example, in the cashback and rewards space, ShopBack continued its dominance across various Southeast Asia markets.

In the fast retail female fashion market, Love, Bonito continued their expansion as they launch in more markets, while its competitor Forever 21 is filing for bankruptcy and it’s now left with only one outlet in Singapore.

TheAsianparent also tightened its grasp on the parenting space this year as it looks to launch its own line of baby and maternity products. Companies like 99.co and Carro are also aggressively increasing their market share in the property and automobile industry respectively.

It is clear to us that 2019 saw the emergence of digital category leaders, and investors are continuing to aggressively bet on these companies. We definitely expect to hear more from these companies in the new year.

2. A Shift Towards Profitable Companies

wework singapore
WeWork / Image Credit: The New Yorker

Another equally big news this year was the downfall of WeWork.

News outlets were flooded with stories profiling how WeWork went from a US$47 billion valuation to almost facing bankruptcy — and the bad news have not even stopped yet.

The story of WeWork marked a shift of perception towards the operations of companies. Prior to this, the startup scene seem to only celebrate companies with high revenue growth, giving rise to multi-billion dollar unicorns.

However, these growth often comes with high cost. Since these multi-billion dollar companies often run on unsustainable cost structure, it resulted in unprofitable balance sheets.

They also often adopt an over-optimistic path to profitability. When business fundamentals caught up with their multi-billion dollar fantasy, everything falls apart.

All of a sudden, the narrative of company valuations are shifting towards profitability instead of revenue growth. Just as in the earlier part of this decade, we saw a shift from user growth to revenue growth.

This year, we also saw the shift from revenue growth to companies with sound business fundamentals or profits. 

Nearer to home, readers will also remember the case of honestbee, which had to restructure its business when their cost structure caught up with the business fundamentals.

3. Multi-Currency War Heats Up

2019 saw the launch of a few fintech companies in Singapore.

Notably, UK financial technology company Revolut made its debut in Singapore in October.

Revolut competes with Singapore startup YouTrip, alongside InstaRem and TransferWise, all of which allow users to easily enjoy a multi-currency wallet with very attractive rates. 

grabpay card
GrabPay Card / Image Credit: Grab

Most recently, ride-hailing giant Grab made waves in the fintech scene when it launched its GrabPay Card as part of its ongoing partnership with Mastercard.

Touted to be Asia’s first numberless card, it is available in both digital and physical versions. With it, users can spend at any global shops that accept Mastercard and earn GrabRewards points for every transaction.

In all, it’s great that the multi-currency scene is heating up with more players as it presents consumers with more options and benefits to choose from.

That said, consumers are not limited to choose from just one card. It’s actually typical of Singaporeans to be holding on to up to 10 active cards, including their bank credit cards, nowadays.

4. Deafening Silence From Crypto Firms

bitcoin
Bitcoin / Image Credit: Hackernoon

2018 saw the decline of cryptocurrency, when the price of major coins such as bitcoin and ethereum crashed from their all-time high to 2017 price levels.

Just as fast as the price rose, 2017 and 2018 saw a major increase in crypto-related firms. With the fall of cryptocurrency, the number of active crypto firms operating around the world also fell.

While companies come and go, what we noticed this year was that the silence from crypto firms is almost deafening, and it is as though no one is talking about the cryptocurrency anymore.

Mainstream news are no longer covering crypto-related stories, and we no longer hear from any cryptocurrency companies.

Judging by the depressed price levels of the various major cryptocurrencies, it will probably take a while before we start hearing from them again.

5. The Official Demise Of Bike-Sharing

In 2019, we also saw the official demise of the bike-sharing economy in Singapore.

ofo singapore
Ofo bicycles / Image Credit: Edgar Su via Reuters

Bicycles that are ready to be rented used to populate the lion city, but they are now no longer in sight after companies such as Ofo, oBike, and Mobike ceased their operations in Singapore.

Even Grab, the dominant ride-sharing app in Singapore, quietly removed GrabCycle from its mobility offering. 

In the first place, bike-sharing never made much sense in Singapore. Besides its hot weather all-year round, Singaporeans already enjoy an efficient and well-connected transportation system.

That said, bicycle and e-scooter-sharing are never seen as a ‘need’ that helps to solve a pressing pain point for users.

6. The Effects Of The US-China Tech War

Another big news that happened this year is the US-China tech war.

On the surface, it may seem as though US and China are embarking on a trade war for economic purposes; but in reality, there are various layers of competition between the two global economies.

Arguably, the most important one is the battle for tech superiority, which closely impacts the economies of the two countries.

The more technology you have, the more you can export those technology to other countries and help to increase the economic power of the origin country. 

huawei google ban
Huawei phones no longer have Google access / Image Credit: Hotwnews

One of the largest manifestation of this tech war was the announcement of President Trump to ban Chinese telecoms giant Huawei Technologies from buying American technology and components.

This means that consumers won’t be able to enjoy Google’s services on Huawei products.

There are other various economical and political implications of the US-China tech war, but what’s clear for us is that 2019 marked the beginning of the battle of tech supremacy in the realms of artificial intelligence (AI), 5G, as well as other future technology between US and China. We foresee this will continue over the next few years,

7. Hong Kong Riot: Could S’pore Be The Next Hotbed For IPOs?

Hong Kong riot / Image Credit: Thomas Peter via Reuters

Finally, another big event that shaped 2019 is the Hong Kong riot.

Hong Kong protests started in June this year, and it was supposed to be a small protest against the government’s new plan to allow extradition to mainland China.

However, citizens feared that this could undermine judicial independence and endanger dissidents, which also strengthens China’s indirect grip on the country.

The protests eventually took a life of its own and riots broke out countrywide. Due to months of riot, Hong Kong is no longer seen as the safe economy hub it prides itself in.

Stock market has seen a free-fall and the end of the riot is nowhere close to being over. There are also talks from China about turning Macau into a financial hub instead of Hong Kong.

With the financial turmoil and political instability of the country, does that mean that Singapore can potentially be the next hotbed for IPOs? 

What’s Next For 2020?

No matter what the new trends or technological changes are for the next decade, we as consumers tend to forget that we have the power to determine the fate of tech companies.

As much as we enjoy the services of new companies which often comes free or heavily subsidised in hopes that we become repeat customers, I think it is also important for us to rally support for companies that are making a positive impact on our daily lives.

How that may look like could be the frequent usage of their services, or even become a paying customer so that they can continue to stay in business.

Remember — once these companies are gone and put out of business, we may never see them again, so take time to show them some love and tangible support.

Featured Image Credit: Carousell / The New Yorker / Hotwnews / Grab

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