As Asia becomes increasingly prominent on the global stage, new ventures will be one of the critical engines of growth for established companies in the region. More than half (56 percent) of business leaders in Asia–Pacific see new-business building as a top-three priority, while 20 percent name it as their number one priority, according to a recent Leap by McKinsey survey.
Singapore, home to an array of large regional companies and multinationals, is especially well positioned to capitalize on this opportunity. Some 43 percent (15 companies) of Southeast Asia’s unicorns (companies with valuations of US$1 billion or more) are based there. To date, more than 40 corporate ventures have successfully launched in Singapore, many since 2018.
While opportunities for new businesses can be found in multiple areas, Singapore-based corporate leaders who responded to the survey named sustainability as a top opportunity for building new businesses, followed by the future of work and supply-chain resilience (exhibit).
Support for corporate ventures
Creating and scaling new ventures is also important for Singapore itself, offering a path for the country to increase its share of globally competitive businesses and to help reach long-term goals. For example, an innovative new aquaculture platform is helping Singapore attain its goal of achieving food security and sufficiency by 2030. To increase its attractiveness as a launchpad for new ventures, Singapore has moved to establish robust funding, a network of established companies and specialists with which to partner, and the connectivity and infrastructure needed to create and launch strong corporate ventures.
In May 2021, the Singapore Economic Development Board (EDB) launched the Corporate Venture Launchpad (CV Launchpad), a S$10 million (US$7.4 million) pilot program that supports qualifying large and established Singapore-based companies new to corporate venturing in building ventures quickly and effectively. In March 2022, Singapore’s Ministry of Trade and Industry (MTI) announced that the CV Launchpad will be expanded to support a wider range of companies.1 Leap by McKinsey is one of five venture studios participating in the program, helping to guide companies through the business-building process.
Often the fastest way for businesses to capture opportunities is through new-business building, which is becoming a core competency. But new-business building is an inherently risky endeavor. While some new businesses succeed in spectacular fashion, most fail to gain traction, with 40 percent folding within the first four years of existence. Fewer than 20 percent achieve annual revenues of more than US$50 million within that timeframe. CV Launchpad understands the many pitfalls—and the proven practices that need to be implemented to improve the odds of success. Through investments and support, CV Launchpad aims to help leaders hone their skills and mitigate risks, increasing their ability to launch businesses that can scale and flourish.