Singapore is the No. 1 spot for start-ups in South-east Asia.
More venture capital (VC) deals happen here than in neighbouring countries. And about 40 per cent of all start-up acquisitions in the region happen here.
Last year, US$454 million (S$578 million) worth of venture capital deals were done in Singapore, compared with US$918 million invested in the rest of South- east Asia, according to a report from the Singapore Venture Capital and Private Equity Association (SVCA).
That sum funded 73 start-ups here, up from 41 in 2012, said the association, which did the survey with private equity research firm Preqin earlier this year.
Acquisitions hit a high of 13 start-ups sold for a total of over US$300 million last year, said local VC firm Monk's Hill Ventures. In 2012, only four start-ups were acquired.
This is only the tip of the iceberg as the research combed only publicly available financial data. Other acquisitions where details were not disclosed were not covered.
Mr Hian Goh of local VC firm Silicon Island said money is necessary for start-ups to grow until they become attractive to be acquired.
Government financial support has encouraged more start-ups and this, in turn, has attracted VC money to Singapore.
"With more start-ups, the potential for acquisitions by larger companies on the lookout to expand their business or to get new technologies rises," said Mr Goh.
The largest VC investments went into two-year-old e-commerce start-up Zalora, founded by German Internet incubator Rocket Internet. Based here, Zalora is aimed at the Asian market. So far, it has received about US$217 million from overseas investors.
Local high-end fashion e-shop Reebonz was a distant second, receiving US$40 million in funding from MediaCorp last year.
VC deals in South-east Asia have been growing yearly since 2007, with the highest increase from US$248 million to US$918 million seen between 2012 and last year.
SVCA chairman Jeffrey Chi said there is a lot of interest in South- east Asia given its 600 million consumers and a growing middle class with cash to spend, and "Singapore is the natural choice for many VC firms to base their operations".
Almost three-quarters of the VC funds came from non-Singapore- based investors, showing that the start-ups here are good enough to attract them.
"Singapore is exposed to the global environment, so right off the bat, (the start-ups) are expected to perform better," Mr Chi said.
"In recent years, many corporate 'escapees' became entrepreneurs, and with the experience, network and expertise, they have a better chance at success."
Some of the biggest Singapore acquisitions in recent years include the sale of Singapore-based online video-streaming site Viki to Japanese e-commerce giant Rakuten for US$200 million last year, and Singapore Press Holdings' acquisition of online motoring portal sgCarMart for US$48 million.
Singapore start-ups accounted for about 40 per cent of the 85 South-east Asian start-ups acquired since 2008.
Monk's Hill Ventures partner Ong Peng Tsin said: "Singapore has been supporting entrepreneurship and start-ups, so now the fruit is realised."