7 Local SMEs Which Succeeded In The Last 5 Years Through Funding

​The local start-up scene is short of anything but HOT – there's no short of investors and venture capitalists, government grants, networking events and start-up websites and channels loaded with up-to-date start-up and funding news, and all these, within a short span of a few years.

While government efforts at keeping Singapore as the best place on earth to do business definitely helped, a lot has to do with the ease with which local businesses get their funding.

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Raising capital to start your own business used to be one of the most difficult aspects of striking out on your own, but with an investment-savvy crowd and a great investment environment drawing angel investors and venture capitalist here, the market is seemingly awashed with funds.

How Local SMEs Get Funding

Some of the most successful local SMEs that succeeded within a short span of 5 years used alternative ways to fund their business.

This is a major difference from the traditional way of starting out – using own funds, borrowing from family and friends or seeking bank loans.

 

With the advent of technology, it has become much easier to get the word out and to market your products so that one can easily acquire investors who might be interested in your business ideas.

Such new ways of funding include Angel Investors, Venture Capital, or Alternative Financing.

Angel Funds: Financing provided by an affluent individual (angel investor) that provides capital for a business start-up in exchange for ownership equity. Angels typically provide capital funding with their own funds.

Venture Capital: Funds provided to seed early-stage, emerging and emerging growth companies. Singapore is starting to see trends of financing platforms raising funds for these SMEs by offering investors a chance to take part in their funding.

In Singapore, it's not uncommon to find some companies funded by both venture capitalist firms as well as angel investors.

The obvious downside to Venture Capital is that businesses may succumb to more pressure for performance by their investors, or even lose some say in the way their business is operated.

Alternative Financing: Includes Crowdfunding or Business Financing methods such as Invoice-Financing.

Crowdfunding continues to be popular for funding new projects and as a way to test the market demand as well, via an online platform to crowdfund from individual investors.

There are many different types of returns, depending on the type of Crowdfunding but investors can expect returns in terms of equity, interest payments or even donate to a social cause with no expectations of returns.

How Successful SMEs Raise Funding In Singapore

Venture Capital & Angel Investors

1. Redmart

Year Started: November 1, 2011

Funding Method: Venture & Angel Investor, including Facebook Co-founder Eduardo Saverin

Total Funding received: $55.1 million

Business Description: RedMart is a Singapore-based online supermarket that delivers groceries and essentials to your home. RedMart's platform enables manufacturers to bypass retailers and engage shoppers directly, as well as provides manufacturers with marketing capabilities and data analytics to enhance their business strategies.

2. FoodPanda

Year Started: April 1, 2012

Funding Method: Venture Capital and Corporates, including big names like Rocket Internet and investment bank Goldman Sachs

Total Funding received: $218 million

Business Description: foodpanda is a global online food delivery marketplace that enables users to place orders at local restaurants via its website or mobile application.

It is called foodpanda in Asia and Europe and hellofood in Africa, Latin America, and the Middle East. foodpanda has partnered with more than 60, 000 restaurants globally, including Pizza Hut, Subway, KFC, McDonalds, and Jollibee.

Foodpanda was launched in 2012 in Singapore but is operated from Berlin, Germany with presence in over 40 countries and 500 cities across 5 continents.

3. 99.co

Year Started: January 8, 2014

Funding Method: Venture Capital and Angel investors

Total Funding received: $2.16 million

Business Description: 99.co is a map-based property search engine that utilises smart algorithms to provide home renters, buyers, and property agents with a fast, transparent, and efficient property search experience.

4. Paktor

Year Started: 2013

Funding Method: Venture CapitalTotal Funding received: $12.5 million

Business Description: Paktor means ‘going on a date’ in a Chinese dialect and the company provides a platform for people to meet others via advanced filters to search for people they’ll like to meet with. How it works: Swipe right to like or left to pass; if someone likes you back, it’s a match and you can send the person a direct message via the mobile app.

Alternative Business Financing

5. Mezzo Interiors

Year Started: 2013

Funding Method: Debt-based crowdfunding where funds were raised via a platform only to accredited and institutional investors.

Total Funding received: $660,000 in 3 tranches

Business Description: MEZZO Interiors were set up in 2013 and specializes in commercial renovations for financial institutions and large corporate clients. Their customer portfolio includes SGX Centre, First Gulf Bank and BNP Paribas.

6. Leap Networks

Year Started: 2012

Funding Method: Debt-based crowdfunding from individual investors

Total Funding received: $750,000 in 3 tranches

Business Description: Leap Networks is a Telecommunication Systems Engineering and Systems Integration Company that provides high availability dedicated Telecommunication Networks Infrastructure for industrial environments and operationally demanding applications such as Oil & Gas, Mining, Petrochemical and Transport Industries.

7. Acepro Security Consultancy

Year Started: December 2010

Funding Method: Invoice Financing

Total Funding received: $410,000

Business Description: Acepro provides a range of security services such as guarding services, security consulting, security technology and equipment to several renowned malls and private properties in Singapore.

Using invoice factoring has helped them to improve their cash-flow greatly and stabilize the operations of their business, helping them to double their year-on-year revenue in an annual amount of S$12 million per year.

As seen from the above examples, funding plays an important role in the success of SMEs and startups in Singapore. While there are many ways to get funding, be it Government Grants for SMEs or Business Financing, business owners will need to examine their goals in order to choose the best way to fund their operations.