When it comes to the prospect of quantum tech in Southeast Asia, Singapore remains the most promising hub in the region with potentials in terms of talents, investments, and IPs.

In an interview with e27, Denis Kalinin, Asia Business Development Manager, Runa Capital, explains how government support allows quantum tech ecosystem to flourish in the country. There is also a strong emphasis on R&D, leading to investors flocking in to the space.

But this does not mean that running a quantum tech company in Singapore is not without challenge.

“Most of them still lack the commercial traction. Basically, it is [a matter of] scalability because most of the startups that we see in Singapore in the quantum tech space are Series A companies, not many of them actually reached even Series B and managed to get meaningful commercial traction,” he says.

“Another concern with Singaporean quantum tech startups is that they usually remain Singaporean. They struggled quite a lot with expanding to other markets.”

This is something that Kalinin believes can be solved by having the support of global investors that can help them with their international expansion journey.

“It’s a fundamental challenge of … nurturing those intrapreneurial skills, because many of the Singaporean deep tech founders, they are first and foremost scientists, not intrapreneurs.”

Also Read: 

Global expansion with a focus

Headquartered in Luxembourg, Runa Capital has a presence in major tech hubs such the US, the UK, France, and Germany. Having been around since 2010, the company’s uniqueness lies in their expertise and focus on the following fields: Deep tech, particularly in cloud infrastructure and the Future of Computing; enterprise SaaS, which nowadays tend to focus more on AI-enabled automation; and fintech infrastructure, especially in core banking infrastructure.

The company’s expertise in the deep tech and related spaces begin with its co-founders Ilya Zubarev, who founded global cybersecurity company Acronis (US$3.5 billion valuation in the recent round led by Blackrock) and virtualisation software provider Parallels (acquired by Corel), among the few; and Dmitry Chikhachev, who led global M&A and greenfield projects at Ritzio Entertainment Group, grew vending operator Uvenco (acquired by Montagu Group) as CEO/COO from scratch to US$25 million revenues and managed HR at Ericsson across seven countries.

In selecting a potential investment, Runa Capital puts heavy emphasis on strong products.

“We really like companies that are product-driven, rather than marketing-driven which can be capital intensive, so we sometimes invest really early on. That is when you can basically identify the product, analyse it and see that it can actually scale,” Kalinin says.

“We analyse the product’s sophistication; how defensible it is. Like, how many developers can copy this product? Is this product competitive enough with large corporations? Because once the area becomes hot enough, the question would be whether it can be reproduced by Google or Amazon or Apple. So, the product complexity and defensibility is one of the most important factors. The team is of course [is also a factor] which is partly related to the product and the team’s ability to execute.”

Runa Capital also puts an emphasis on having a global orientation. This is important especially in Asia, where startups tend to confine in their own regions, such as the case with unicorns such as Gojek and Grab.

Also Read: 

What Runa Capital can offer is an opportunity to enter global markets such as Europe, which he sees as a strength for the firm.

“Deep tech in Europe is growing really fast in terms of scientific research and government support. For example, for photonic investments and semiconductors. There are lots of talents including scientists and developers. For deep tech companies, in some aspects, Europe might be even more interesting than the US market.”

The firm is currently raising and deploying its fourth fund with the target size of US$250-300 million for seed and Series A stage companies.

—

Image Credit: Runa Capital

The post Runa Capital plans to propel Asian deep tech startups onto the global stage appeared first on e27.