Innovation and its limits

There is now funding for local farmers to buy new equipment or trial new technology – over S$23 million (US$17 million) has been committed to 60 projects as of end-2023.  But Rajan said that local farms need to make sure they are profitable with existing innovations before adopting new ideas and applications. While Singapore growers have made inroads into local plant science and automation, the industry isn’t yet ready for the “next level” in genetics, advanced robotics and machine learning, Rajan said.

The issue does not just lie within the vegetables sector. Guo Xiuling, CEO of Temasek-owned agrifood accelerator platform Nurasa, said that many early-stage startups tend to excessively focus on the technological side of things at the expense of the commercial elements.

“For the plant-based side specifically, there was a certain belief that consumers accepted their food. They over-communicated the environmental impact, rather than the flavour, taste and cost of their products,” said Guo, when asked what were the main reasons past agritech startups have failed.

Singapore’s food innovation drive is also buffeted by global headwinds. While agritech investments had its moment in the sun in 2020 and 2021 – driven in-part by sustainability and security concerns amid Covid-19 – financing appetite has since plunged sharply.

According to deals tracker Pitchbook, funding for agritech dropped by nearly 40 per cent year-on-year in 2023. Vertical farming, in particular, fell 91 per cent in early 2023 compared to a year before – with financiers spooked by bankruptcies at several high-profile companies. Interest in other sectors such as alternative proteins have also cooled as companies struggle to entice consumers.

Sandhya Sriram, who co-founded home-grown alternative seafood firm Shiok Meats in 2018, recounted the momentum it rode on after the “30 by 30” goal – which includes regulatory support for cultivated meat – was announced four days after launching its first lab-grown shrimp dumplings. 

“Overnight, the whole media, the whole of Singapore started saying what we were doing was amazing and were interested in talking to us,” she said. “For the next couple of years, things were really good. The whole world was pumping a lot of investment into this industry. Though sometimes I felt it was too much of a hype.”

In March, Sriram announced she will step down as CEO upon the firm’s merger with alt-meat startup Umami Bioworks – which came on the back of two rounds of layoffs and unprecedented difficulties faced in scaling the production of lab-grown crustacean meat. Without sharing specific names, she said that some other startups are looking to merge, especially those with common investors between them. But such consolidation is not entirely surprising for the nascent industry, she said.

“None of the investors have lost complete interest yet. They still believe that the industry can do well, but they just want to make sure they get good value for their money, ” said Sriram. “So I'm definitely looking forward to more companies raising more money, but at the right valuations and at the right time; not with these super high bubble valuations.”

The fact remains that high-rise Singapore presents a landscape largely incompatible with the conventional farming practices that larger food producing countries – including the city-state’s neighbours – can leverage.

Right before the “30 by 30” effort began, Singapore had announced the recall of dozens of hectares of open farmland in its Lim Chu Kang agricultural estate, to make way for new military training grounds – itself necessitated by the development of nearby housing estates.

Some players in the aquaculture sector are also looking to technology to improve yields. Singapore’s coastal waters are not the most forgiving for fisheries – the many cargo ships calling at nearby ports bring novel contaminants in their ballast tanks. Regional waters also host endemic pathogens lethal to some farmed fish species, such as the scale drop disease virus.

Tan Ying Quan, head of strategy and Singapore operations at Barramundi Group, believes improving fish genetics is key to solving such challenges. There has already been some success in this field, in shorter growth cycles and increased resilience to environmental stressors, Tan noted.

Farmers will also require effective vaccines against diseases, Tan said.

“Given the evolving nature of bacteria and virus strains, developing vaccine capabilities becomes necessary to ensure that they can be responsively updated to serve the farmer's needs,” he said. Barramundi Group had in recent years ceased sea bass farming in Singapore due to outbreaks of the scale drop disease virus, for which there are no effective vaccines.

Sector players understand that such innovations are contingent on market dynamics, given researchers need a sizeable addressable market to commercialise their scientific breakthroughs. Tan believes a “laser focus” on developing a single fish species will help, while concurrently improving the industry’s collective bargaining power.

But Singapore start-ups pursuing innovation may need to look beyond the limited market size at home. 

Claire Pribula, managing director of Singapore-based fund The Yield Lab Asia Pacific believes that potential export markets for local innovation include the United States' inner cities, where access to affordable fresh vegetables is an issue, and the Middle East which has limited arable land.

Ultimately, business expansion should not be seen as mutually exclusive to Singapore's own food security goals, Pribula said.

“You want a company to rise to its highest potential…it can do that and help and serve Singapore at the same time,” she added.