Singapore’s state fund Temasek warns about reducing early-stage companies’ exposure after a series of bad investments. The new approach comes as a lesson from the explosion of the FTX exchange, where Temasek was one of the biggest investors.
The Ministry of Finance’s owned Singapore Fund eliminates risks by avoiding early stage businesses. The fund lost access to low interest rates after a series of bad investments.
FTX was a warning story
One of Temasek’s biggest traps is FTX, which has made the image of a reliable and successful Crypto startup for months. The fund ultimately wrote down $275 million, reducing workers’ compensation and suffered reputational damage.
The fund was one of FTX’s well-known backers, including SoftBank and BlackRock. SoftBank had to amortize $100 million from its FTX investment.
As a result, Temasek has become more bearish towards early private companies, as reported by the Financial Times, according to sources with knowledge of the fund’s investment strategies.
Temasek was also a hit from the Efishery Company, which wiped out its $300 million worth. The Indonesian agritech company collapsed after allegations of fraud.
Temasek has already scaled its investment strategy, sending it from $4.4 billion to early stage companies to $599 million in 2024. During the same period, the number of cases fell to 82 last year.
The new strategy will affect direct investments, which Temasek is more conservative in curating the list of companies. The national fund supports startups indirectly through small, yet venture capital funds.
Temasek has abandoned Crypto startups since 2024
Temasek has already made 11 crypto investments, but its exposure to FTX tokens had the greatest weight and influence. Overall, the company achieved it 156% return Crypto VC token.
In Temasek’s $300 million portfolio, Crypto was relatively small, but the FTX crash had a reputational effect. Investing through tokens also carries the greatest risk, as crypto transactions can fail to halt and the value of assets can collapse in minutes.
Temasek focused on a handful of crypto startups, but the FTX crash caused the fund to rethink its strategy. |Source: Cryptorank
Temasek’s latest crypto investments came from Partior, a centralized Crypto finance company. Previously, they supported the Animoca brand for $110 million and Consensy for $450 million in Series D rounds. Fund’s concentration He participated in a central exchange with the crypto payment ecosystem. However, indirectly, Temasek is even involved in NFT projects like Authingick through the Menyala VC fund.
Temasek’s existence has been used to increase the exposure and reputation of crypto projects. The state-backed fund left the space just before the next trend for companies holding BTC’s Treasury, and has not mentioned BTC in relation to its portfolio. Crypto’s last announced investment in a startup came from Temasek.
Some of Temasek’s early investments have been success stories that include current staple food businesses such as the Alibaba E-Commerce Platform and the US food delivery company Doordash.
Strategic revisions continue to the general public Slow VC funding from Crypto Startups. There, New Deals continued to slow to Q2.
