Kush Agarwal is a trained scientist who calls himself “an entrepreneur by DNA”. His advice to budding startup founders: Manage your expectations with VCs
Kush Agarwal is a serial entrepreneur who describes himself on LinkedIn as “a technologist by training, a scientist by profession, and an entrepreneur by DNA”. After founding an earlier startup that dealt with machine learning and the Internet of Things (IoT), and following that up with another that merged IoT and A.I., Agarwal is on to his third which focuses on sensor technology to detect defects in buildings.
His latest startup, WaveScan, closed its first seed round in June after raising a seven-figure sum. So, in the five years since becoming a founder, what does he make of the Singapore startup scene?
“Back in 2014, 2015, I think people were trying out and adopting robotics and automation,” he recalls. “Then IoT came into picture and it was all about the smart sensors, building automation, PropTech, enhancing the productivity and all of that.
“So in terms of the Singapore startup ecosystem, we have started to see robotics or IoT being generalised like SaaS (Software as a service) both in terms of tech adoption as well as in terms of VC mindset. So now it is already a norm where people are all talking about enhancement in productivity, efficiency, automation, robotics, and drones.
“That has become part of day-to-day practices. You can see drones flying around and doing inspections, and robots being used in cleaning operations. Around 2016, 2017 was when we started to see deep tech coming into the picture in Singapore.”
He adds: “There were certain accelerators and incubators that started setting up their offices in Singapore. And from that, we started to see the concept or idea of scientific entrepreneurship. And that is where science-driven research or technologies started to get into the market through VC deal flows. And that is around the same time, in 2018, when we started to brainstorm and brought WaveScan into the market from A*STAR.”
Managing expectations
A*STAR, or the Agency for Science, Technology and Research, is Singapore’s lead public sector R&D agency. As part of Singapore’s push to promote technology, entrepreneurship and collaboration between startups and MNCs, government funds like SEEDS Capital and EDBI are investing in startups alongside private investors. Now, through EDB New Ventures, the government is also supporting large, established corporates to launch new ventures in Singapore.
Agarwal notes that there are plenty of venture capitalists backing deep tech startups that “cover agritech, food tech, cell-based milk and meat, to advanced manufacturing or green tech”. Compared to seven years ago, there is more deep domain scientific expertise and it is now easier to secure funding and “launch companies with a longer go-to-market time”, he muses.
But he has a word of caution for first-time founders.
“You have to calibrate your expectations with respect to the Singapore ecosystem,” says Agarwal. “Although Singapore is a global country and there are funds and startups coming from all over the world, it's still tricky to raise capital during the early stages. When you are going from idea to MVP (minimum viable product), and you are banking or relying on the fact that you will raise capital from Singapore-based lead VCs, calibrating the expectations is very important in terms of valuations and what to expect from the VC network.
“Unlike overseas funds, most VC funds in Singapore are making calculated, less risky deals, tapping on government co-matching investments for risk-sharing and benefiting from the upside of the deal.
“Also, despite a lot of push from the Singapore government, corporates in Singapore are still risk averse. Only when the technology has been very well validated and there is a success story or a case study overseas, only then would corporates in Singapore be ready to deploy their technology and test it out. Only a handful of corporates in Singapore are early-adopters and are working with early stage startups.”
He continues: “I think the young entrepreneurs or first-time founders will have to calibrate their expectations according to the Singapore ecosystem. At the same time, there are other things which I think founders have to look out for in terms of building up the team and getting access to team members.
“Deep domain expertise, because of COVID-19 and other issues, can be hard to acquire on top of manpower costs in Singapore. In certain niche areas, we are talking about deep tech scientific technologies.”
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Last updated on 30 Jul 2021 .
