Singapore has long been lauded as a business epicenter, and one of the hottest startup ecosystems in the world. Currently counting over 3,600 active startups, the city-state is second only to Bangalore in terms of funding (in the Asia Pacific region), according to a report from Compass.
By 2020, Singapore will have a total of 188,000 millionaires, which is about one out of every thirty citizens, according to recent data from WealthInsight. That's a projected increase of 18 percent over the next five years, which beats the projected millionaire growth rate in Hong Kong (16 percent).
On Friday, DBS Bank, a leading bank based in Singapore, announced that it would be doling out S$10 million ($7.2 million) to the local startup community over the next five years. One such initiative is DBS HotSpot , a pre-accelerator program that gives S$25,000 ($18,000) dollars to early-stage startups--without actually taking an equity stake in the companies.
To date, 11 Singaporean startups have participated in the program, which will accept applications for its next round starting in 2016.
There are many factors to explain the rapid rise of Singapore as a startup hot spot. In 1999, the government established a $1 billion "Technopreneurship Fund." Now, it's investing an additional $50 million in local startups.
"Singapore's government has been at the leading edge," noted Kuo-Yi Lim, a venture capitalist and co-founder of Monk's Hill Ventures.
It helps that the nation is well-connected to foreign market; nearly half (49 percent) of Singapore customers live outside the nation.
The financial hub also continues to attract foreign investors. GrabTaxi, a Singapore-based ride-hailing app, has raised an enviable $680 million from such U.S. backers as SoftBank and Tiger Global Management. The company also benefits from Singapore's digital-savvy culture; nine out of ten residents have access to a smartphone, according to a 2014 report from Deloitte.
Still, there are drawbacks to consider when it comes to infrastructure. Across the APAC region, there's limited access to education and healthcare, and the road density in Singapore is on par with London, New York City and Tokyo.
"The amount of smart money is relatively limited," adds Lim, indicating that there are few VC funds in Singapore dedicated to making long-term investments. Rather, it tends to be "very quick capital."