The fundraising landscape has grown a lot more vibrant and sophisticated in recent times, all of which point to a maturing and healthy startup ecosystem. In this article, we examine trends in startup fundraising and its impact on real estate.
In 2017, CBRE Research tracked a total of 215 funding deals in startups which totaled US$4.652 billion, translating to an impressive 5-year CAGR growth of 66%. Given Singapore’s status as a financial hub, it is not surprising that fintech or tech-enabled banking and financial services was the most active sector in terms of total deal count. Healthcare, media and proptech rounded up the next top three sectors.
Based on our findings, the key observation is that companies typically moved to larger office premises after a major funding round. However, the size of funding does not necessarily correlate with a larger space requirements as it is still subject to the firm’s growth stage at that point in time and the nature of its business. There was also a time lag of approximately one to three quarters between a funding announcement and securing a new office space.
Singapore’s quest to become one of the world’s leading startup hubs seems to be slowly bearing fruit. The addition of home-grown startups, supported by a vibrant startup ecosystem and an active fundraising scene, could add another feather in the demand cap.