Singapore’s unicorns face growing pains, but global expansion offers hope

SINGAPORE: As the city-state’s high-flying unicorns, companies valued at over US$1 billion, navigate a turbulent business environment, they are seeking new avenues for growth. According to the latest Straits Times report, despite challenges such as securing funding, regulatory obstacles, and layoffs, these start-ups are aiming for expansion into overseas markets to sustain their rapid growth and global ambitions.

Expanding amidst adversity – Carro’s resilience

Carro, a used-car marketplace, is one of the companies that has weathered some of the toughest storms in recent years. The firm achieved unicorn status in 2021, following a US$360 million capital injection led by Temasek and Japan’s SoftBank. But the journey wasn’t easy. According to co-founder and CEO Aaron Tan, the pandemic presented the “most difficult times” for the company. Sales plummeted to zero, and securing funding was nearly impossible. Despite this, Carro managed to continue expanding, particularly into markets such as Japan and Hong Kong, offering a range of services from vehicle sales to insurance and financing.

Carro is now eyeing AI talent globally as it looks to integrate artificial intelligence more deeply into its operations. Although Tan declined to disclose the company’s current valuation, he confirmed it remains “well over US$1 billion”.  While the firm has no immediate plans to expand its workforce in Singapore, Tan hinted at a potential public listing in the future, contingent on market conditions.

Navigating regulatory hurdles – Sygnum’s strategic moves

Sygnum, a digital asset banking firm, has also faced its share of challenges, notably with regulatory hurdles in Singapore and Switzerland. Co-founder Gerald Goh spoke of the company’s journey to secure the necessary licences to operate as a regulated financial services provider. “It was a humbling process as we were pioneers in the industry,” he said. Despite the obstacles, Sygnum raised US$58 million in January 2025, reaching unicorn status. The funds will support the company’s expansion into Europe and Hong Kong. Goh emphasised that Sygnum is focused on taking advantage of emerging developments, especially in markets like the United States, although he did not provide specifics about any future listing.

The funding drought: A tough road ahead

The global start-up ecosystem is facing a prolonged funding winter, leaving many unicorns struggling to secure capital. A report by Enterprise Singapore and PitchBook highlighted a significant decline in funding, with local companies raising only US$4.05 billion in the first nine months of 2024, compared to US$8.2 billion in the same period in 2021. The situation has prompted many unicorns, such as home-grown marketplace Carousell, to prioritize profitability over expansion. Despite a 7% headcount reduction in late 2024, Carousell remains well-capitalised, according to CFO J.J. Ang.

However, industry experts warn that these unicorns may face further challenges as funding options remain scarce. Junxu Lye, founder of fintech start-up Acme Technology, suggested that many companies could see their valuations reduced if they fail to deliver substantial profits. He also noted that the Singapore market presents limited scaling opportunities for start-ups, urging firms to explore international markets, particularly the US.

The importance of global expansion

Despite the difficulties, there is optimism surrounding Singapore’s unicorns. With a large concentration of venture-capital firms in the city-state, there remains potential for growth in international markets. According to Zen Chin, vice-chairman of SGTech’s Singapore Enterprise Chapter, unicorns must look beyond Singapore’s domestic market and expand to larger regions such as the US, Europe, and China to secure their place in the global economy. Enterprise Singapore’s Emily Liew echoed this sentiment, highlighting the critical importance of identifying the right markets for expansion as a key factor for success.

As Singapore’s unicorns grapple with funding challenges and changing market conditions, their focus on global expansion could be the key to ensuring their continued growth and long-term viability. The coming years will reveal whether these companies can navigate the evolving landscape and continue to thrive in the face of adversity.