It was all over the headlines when Trax announced it became Singapore’s next unicorn. I, however, was not enthused.
As a pro-Singapore evangelist, I should have celebrated as it shows Singapore is becoming the hotbed of big valuation companies, but as I dug deeper into the news, I wondered whether it would have any big impact to the Singapore economy; jobs for Singaporeans and more prosperity for its people.
Upside for Singapore
The Trax founders, who hail from Israel, spoke about their destiny in meeting in Singapore in 2010 and deciding to choose Singapore as their headquarters, which houses their four co-founders and a few senior managers. In the next 18-24 months, they plan to do a public listing: first a listing in New York, followed by a dual listing as offered by SGX.
This is a good recovery for Singapore’s SGX, given that it failed to get Singapore-connected unicorns Razer and Sea (formerly Garena) to even dual list on its board.
But beyond that, I fail to see any further upside. Granted, GIC (one of Singapore’s sovereign wealth funds) has invested in the company and may possibly reap good returns should the company soar further. But beyond that, I hear no further economic benefits to Singapore, maybe taxes. But in a world of efficient tax structures and Trax having subsidiaries in China and possibly in Europe, one might say the Singapore headquarters might not be getting much of that pie.
Other tech groups have doubled down in Singapore, why not Trax?
Let’s take Grab, Singapore’s first decacorn. Formerly from Malaysia, Grab is grateful for Singapore’s help through its actions. Grab’s commitment to a US$132 million spanking new Singapore headquarters in One-North (Singapore’s Silicon Valley) and to house 3000 employees is a significant testament.
Google launched its Singapore headquarters, which houses 1,000 employees in 2016, including a number of undisclosed engineers. When one visits Google Singapore, you can clearly see the company’s commitment through the investments it has put in. As shared by Caesar Sengupta, one of Google Singapore’s vice-presidents and a Singaporean since 2006, he explained that the nation is a good place for “long-term bets”.
A source from Google, who did not wish to be named, shared that Google has brought in global product and engineering projects, rather than only using Singapore as an international sales office. This further underscores how Singapore can be a great startup hub for talent.
Stripe declared that its Singapore operations will be the Asia-Pacific engineering hub and will include all of the core Stripe functions when it launched in late 2018. Patrick Collison, CEO and Co-founder of Stripe, shared in a recent Tech Forum in San Francisco hosted by Singapore’s Economic Development Board that Singapore is one of three countries that has a net inflow of patents, which is possible due to its open foreign talent policy, who help to build up the nations R&D capabilities.
Razer’s co-founder, Min-Liang Tan is Singaporean and made his successes in the Bay Area, is re-committing back to his home nation with a Southeast Asian headquarters also based in One-North, with an estimated gross floor area of 19,300 square metres.
I can continue talking about more companies like Sea (Garena), Go-Jek, Dyson, MSD and Facebook but you get my point.
On the other hand, all I am seeing from the report on Trax’s fundraising, is that Trax will have 110 employees in its China subsidiary and possibly more if it’s European acquisition goes through, but no news about seeing Singapore’s HQ growing.
It is quite evident that Singapore does not appear to have inadequate tech talent, as so many known tech firms have both established their headquarters and grow their engineering operations in Singapore.
Trax can do more and give back to Singapore
It struck a nerve when I read about Trax being a Singapore-based startup that does not have a single Singapore client. For a country that has a GDP of US$323 billion, it is no slouch in terms of a variety of economic activity.
Singapore is well known to be advantageous to be a starting point for startups, where B2B trials with the Singapore entities and government lend weight and credibility. To work with Singapore entities shows also the commitment by startups to engage its local market and provide economic benefits to its products.
Let’s talk also about hiring practices. If you see the company’s website, I am unsure how many Singaporeans are truly being hired. Are Singaporeans that untalented to be part of the team to deliver an outstanding global product?
I won’t deny the successes of these founders. But their actions speak of the lack of gratitude to the nation that provided Trax a sound foundation to grow.
I wouldn’t be surprised that once Trax has listed in New York, it will merrily uproot itself and base elsewhere, finding the next place to commercially benefit them. It doesn’t have anything much committed to Singapore. Or maybe Singapore is just a springboard for them to greater heights.
Sorry, if you aren’t here considering economic benefits for my nation and my fellow countrymen, I wouldn’t want to celebrate your success. Neither would I call you friend and support your startup.
The author is a staunch startup evangelist of the Singapore tech ecosystem. This article is part of the Heartware Singapore series, where the author shares on different topics to spur the Singapore startup ecosystem. All views expressed of his own.
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