Singapore's Startup Engine Shifts Gears: AI Deals, New Hubs and a Tighter Funding Climate

Singapore's tech scene closed the first half of 2026 with S$4.2 billion in venture capital deployed across 318 deals, according to figures released this week by Startup SG, the government-backed accelerator network. The number of deals is down roughly 12 percent from the same period last year, but average deal size is up — a sign that investors are concentrating bets rather than spreading them thin.

The shift matters because Singapore has been positioning itself as Southeast Asia's default AI commercialisation hub since the National AI Strategy 2.0 was published in late 2023. That ambition is now meeting a harder test: global capital is more selective, US-China tensions are reshaping which investors can back which founders, and the heat coming off markets in New York and London is being felt all the way down Fusionopolis Way.

One-North Stays Busy, But the Action Is Spreading

The Biopolis and Fusionopolis clusters in one-north remain the physical heart of deep-tech activity. JTC Corporation, which manages the precinct, confirmed this week it has signed leases with four new AI infrastructure tenants for space in the Galaxis building along Ayer Rajah Crescent, with fit-outs expected to complete by Q1 2027. The names are under non-disclosure for now, but sources familiar with the deals say at least two are regional arms of US hyperscalers expanding GPU-heavy workloads out of US data centres.

Meanwhile, the action at Mapletree Business City in Pasir Panjang has picked up quietly. Three Series B startups — two in logistics AI, one in climate fintech — relocated from co-working spaces in the Central Business District to Mapletree's campus in the past 60 days, citing lower per-square-foot costs and proximity to port logistics partners. Rents at premium one-north addresses have crept up to around S$8.50 per square foot per month, pushing growth-stage companies to scout alternatives before their headcount forces the issue.

The Economic Development Board reported in June that Singapore attracted 27 new tech company headquarters in the first five months of 2026, compared with 19 in the equivalent period of 2025. Most are AI, semiconductor design or cybersecurity firms, and a notable cluster is coming from South Korea and Japan — a trend driven partly by those governments' own push to internationalise their tech champions rather than any single bilateral deal.

Funding Gets Pickier — and Founders Are Adjusting

The tighter deal count is forcing founders to think harder about runway. Enterprise Singapore's SEEDS Capital co-investment scheme, which matches private investors dollar-for-dollar up to S$2 million, received a record 430 applications in Q2 2026 — up from 310 in Q2 2025. Acceptance rates have not risen proportionally, which means more founders are being turned away or asked to come back with stronger revenue traction before funding is committed.

Several founders speaking at last month's Tech in Asia Singapore conference at Suntec City Convention Centre flagged that investors are now pushing hard for 18-month paths to profitability rather than the five-year growth stories that passed muster in 2021. The median pre-money valuation for seed rounds in the city-state dropped to S$6.8 million in the first half of 2026, down from S$8.1 million a year earlier, according to data from VC platform Tracxn.

For startups that can demonstrate AI revenue — not just AI features — the picture is different. Deals in that narrow band are closing faster and at higher multiples than almost anything else in the market right now.

The second half of 2026 will be clarifying. Singapore FinTech Festival returns to Marina Bay Sands in November, and organisers are already signalling a heavier focus on AI-native financial infrastructure than in previous years. Founders who have not sorted their unit economics by then will find the expo floor a more hostile place than usual. Those who have will find no shortage of cheques looking for a home — just far more scrutiny attached to each one.