Singapore’s Startup Ecosystem – Too Many Accelerators?
Joyful Frog Digital Innovation (JFDI) recently announced the cessation of their accelerator program and rumours swirling about the potential closure of SPH Plug and Play. Over the past couple of years, we have seen over 15 accelerators sprout up in Singapore. The startup ecosystem has seen tremendous support from financial institutions, government bodies and international organisations. With such vigor in the ecosystem, how do we explain the closure of Southeast Asia’s first accelerator? Is the sudden influx of startup support good for the industry?
Are Accelerators Feasible in Asia?
After running for 6 years, JFDI has decided to shut down its accelerator program which launched several successful startups like Glints, TradeGecko and BoxGreen. The main reason for their closure was that they “never found a way to recirculate risk capital fast enough to make JFDI a self-sustaining business”. Relying on external sponsorship, JFDI could no longer compete with giant corporate accelerators with deep pockets and infinite resources.
The key term in this industry is ‘accelerate’. Even with near-limitless risk capital, an accelerator cannot succeed if it takes too long to realise their returns. Every business has to have a considerable level of liquidity. Liquidity can come from profitable operations or external financing but you need cash to sustain the business.
Thanks to the foundations laid out by JFDI and other pioneering accelerators, corporations now see the importance of embracing disruption, working hand in hand with entrepreneurs. With sufficient funding and solid business pipelines, startups may stand a better chance at achieving success.
Perhaps the closure of JFDI merely signals the next stage of maturity for Singapore’s startup community. With better chances at success, we may see successful founders and entrepreneurs coming back to contribute to the success of others, exemplifying the ‘pay-it-forward’ mentality that drives the startup ecosystem. Maybe then will we be able to see an accelerator like JFDI thrive and excel. The industry is still in its infancy and we can expect a lot more changes in time to come.