Temasek, Singapore’s state investment group and one of the largest investors globally, has significantly reduced its investments in early-stage companies by 88% over the past three years.
Investment in these ventures dropped from $4.4 billion in 2021 to just $509 million in 2024. This data was reported recently, referencing figures from tracxn.
This year, Temasek has allocated $70 million to early-stage firms, according to reports. Analysts believe this strategic shift is due to rising interest rates, significant losses from multiple failed startups, and challenges for high-risk private companies trying to go public.
Back in 2021, early-stage investments accounted for 6% of Temasek’s portfolio. The group acknowledged the “risks and challenges” these companies face. “Since 2022, we’ve seen a shift in investment flows towards early-stage ventures, prompting us to take a more cautious stance on new investments,” Temasek noted in its report.
With a portfolio valued at $300 billion, the investment group is now focusing on a smaller number of companies that are currently viable.
One significant restructuring factor was Temasek’s write-down on a $275 million investment in cryptocurrency exchange FTX, which went bankrupt in 2022. It was reported that Temasek was one of FTX’s largest investors.
Following Temasek’s decision to pull back from investing, some lawmakers in Singapore raised questions about the organization’s due diligence, according to Pymnts in November 2022.
In a statement on their website at that time, Temasek asserted it conducted similar due diligence for FTX as it does for other investments, including checks on regulatory compliance, licensing, audited financial statements, and cybersecurity evaluations.
Reports in January indicated a decline in active venture capital (VC) investors in the U.S. since 2021, which was a peak year for VC activity as financial institutions became more cautious and focused on Silicon Valley’s largest firms.
Data cited by the FT showed that the number of VCs investing in U.S. companies fell from 8,315 in 2021 to around 6,175 in 2024, according to Pitchbook.
