Author: Asia Team, New Zealand Trade and Enterprise
There are two main types of buyers for deep tech in Singapore. Learn who to approach, where your deep tech offering could fit in and how to sell it to buyers.
In Singapore, the parties that are interested in and have the budget for deep technologies are limited to a few key players – mainly the public sector and large multinational corporations (MNCs).
As a new company entering the market, you must first understand who your potential buyers are and what needs they have. What’s more, because deep tech is so novel, there may be few, if any, competitors in the market, especially one as small as Singapore. Instead, think about who the related global solution providers and the key decision-makers in different sectors are, and identify opportunities where your deep tech offering might come in.
What are buyers looking for?
Deep tech and innovation are crucial to powering future industry growth and Singapore has been actively growing its deep tech capabilities in recent years. The Economic Development Board is the agency responsible for investment promotion and industry development, and it attracts foreign businesses to Singapore. Cap Vista, the investment arm of the Defence Science and Technology Agency, focuses on early-stage deep tech start-ups.
To see where you might offer your solution, look at government initiatives and the sectors that the government is focusing on growing or has allocated budget to.
One such area is digital transformation. In 2019, the Singapore Government invested S$500 million in AI initiatives and awarded up to S$2.6 billion of tenders for ICT projects. It has also launched the Singapore Green Plan 2030, and the Budget 2021 allocates funds to the following areas:
- S$30 million for electric vehicle-related initiatives over the next five years in a nationwide move towards cleaner energy vehicles.
S$60 million for the Agri-Food Cluster Transformation Fund to support technology adoption.
S$19 billion for public sector green projects and issuing of green bonds on selected public sector infrastructure projects.
Healthcare in Singapore is also a growing sector that’s set to be worth S$49.4 billion by 2029. Healthcare spending, both public and private, is expected to account for 5.9% of GDP and could reach 9% by 2029.
The key buyers in healthcare include the Ministry of Health and private sector hospitals such as Parkway Hospitals Singapore – the largest private sector healthcare provider in Singapore and a significant buyer of medical equipment. Healthcare buyers are increasingly looking at AI and 5G technologies, telemedicine and cybersecurity.
Look for the procurement or department head of a hospital or healthcare provider who understands the various user pain points and the tech solutions that could solve these, and can make purchasing decisions accordingly.
Many MNCs have corporate venture arms that partner with external businesses by investing and/or providing strategic advice and consultation in return for a share of acquisition equity stakes.
Corporate venture capital (CVC) spending has grown globally across different segments. In the United States, CVC outstripped traditional venture capital investment in 2018.
Singapore has also seen a proliferation of corporate venturing, with venture investments into Singapore-based businesses growing at a compounded 30% annually since 2014 to be worth US$1.02 billion in 2018. Experts predict CVC could exceed 20% of overall VC investment.
Corporations benefit from investing in start-ups as they get access to emerging technologies and innovation, new resources, talent, acquisition and financial returns.
Identify the opportunities, the relevant partners and the decision-makers to target. Some of those involved in deep tech include:
Philips Ventures – healthcare venture arm of the Dutch conglomerate
MassMutual Ventures – a global VC that invests in enterprise software, cybersecurity, financial technology and digital health companies
IHH Healthcare – one of the largest private healthcare groups in the region which also explores investment in healthcare start-ups.
New Zealand deep tech businesses should look for corporate venturers that can help them with capital, customers, product development, hiring and an eventual exit.
Also look out for the fund manager of the CVC whose role is to identify and evaluate start-ups and how much to invest. Partner closely with your in-market contact who will be best person to advise you on the next steps.
Note that some CVCs can be quite narrow in their focus, so both parties need to have their goals aligned in order to succeed.
How to sell deep tech
Establish your proof of concept and proof of value
A solid proof of concept (POC) shows potential buyers that the scientific principle of your technology or solution works. It outlines the problem it solves and demonstrates its commercial viability. However, POC alone is not enough to convince someone to part with their money – you also need proof of value (POV).
POV involves further development on the technology and how it can be applied and commercialised. Present a detailed business-use case or work on a prototype to show how your technology is applied, and the results and value it delivers. Deep tech solutions should also demonstrate defensible intellectual property.
Understand buyers’ procurement processes
Companies have different procurement processes, sales cycles, financial years and budgets. You want to make sure to pitch your idea at the correct time and be aware of a buyer’s requirements.
Some MNCs have an innovation or research department for developing the company’s innovation strategy. These people sometimes write the requirements for tech purchases and have the knowledge to evaluate submitted proposals. Also check if the procurement process evaluates based on capabilities or CapEx.
Pricing for deep tech can also be complex. Do a cost-benefit analysis and engage a consultant to help you. Some organisations have different financial models as well, so you should adjust your pricing according to their terms and make sure to comply with their governance.
When it comes to government agencies, tender requirements are listed on the national e-procurement portal, GeBIZ. However, there may not always be tenders suitable for a deep tech business. This could be due to a lack of awareness of the need for your particular solution.
The way forward, then, is to form partnerships, present to key decision-makers at management level, and tailor the uniqueness and benefits of your offering to get people interested.
Get the right technical sales talent
In addition to expertise, it’s essential to be able to clearly articulate what your product does at a high level and what value it brings to customers.
Look for salespeople who have technical experience in enterprise and tech sales, or who have direct experience working in a specific sector that you are targeting. They should be able to talk at the level of customers who don’t have the time to take a ‘technical deep dive’.
Educate the market
Depending on the depth and complexity of your deep tech offering, you will need to allocate some budget to educate the market about it. It’s hard to allocate a ballpark figure, but plan what type of training or activity you need to do to show users your solution.
Target the person at the top – the CIO or CTO – to make sure they understand how to implement your solution and the benefit to their company. For software solutions, you can also implement online training modules.
If you have a new solution that’s applicable to the healthcare sector, seminars are an effective way to educate stakeholders about its application. Follow up with hands-on training.
Be sure to get feedback from users of your product so you can make continual improvements.