04 May 2020

How Cap Vista Aims to Safeguard the Nation through Investment in Deep Tech

SINGAPORE /e27/ — Earlier this year, the Singapore government announced an S$300 million (US$215 million) worth of additional support for the country’s deep tech startup ecosystem.  

The support has received the warm welcome of the local deep tech startup ecosystem, which also includes venture capital firm Cap Vista.

Founded in 2003, Cap Vista is a corporate VC fund that is working under the Defence Science and Technology Agency (DSTA), a statutory board under the Ministry of Defence of the Singapore Government. The agency’s responsibility is to acquire new technology to be used by the Singapore Ministry of Defence and the Singapore Armed Forces.

Focussing on early stage deep tech startups, Cap Vista invests in Singapore-based companies or foreign companies which aim to set up base in Singapore.

CEO Zhen Hao Chng explains to e27 that the firm keeps watch of the latest tech innovation in the market –and how it can help safeguard the nation.

“We want to … bring in these startups’ tech innovation because we are aware that there is a lot of money being pumped into the sector. We can bring in [these technologies] to help accelerate our own indigenous development,” he continues.

In this interview with e27, Chng reveals what sets the firm apart, particularly in how it is working with startups.

A CVC on a Mission

As a CVC backed by a government agency that is dealing with the matter of defence and security, Cap Vista can offer more than just funding to its portfolio companies.

“We can bring you the defence use case, contracts, and revenue, and if you want to scale this way, we can also help link you up with all the government agencies,” Chng says.

“Although we are a VC, the VC is simply a mean to an end. We are not here to make money like a typical fund though the companies must be profitable and generate revenue. We are here to get the technology to put to use in the ministry, armed forces, or the government agencies that we work with,” he continues.

This is why Cap Vista focuses on the deep tech sector, which is known to dive into innovation that takes longer to research and develop.

For the startups themselves, the proposition that Cap Vista offer can be beneficial especially when considering the nature –and challenge– of deep tech investment.

Chng points out that there remains a gap between the development of the tech itself and its commercialisation. Apart from that, investors tend to aim for quicker returns and are wary of the level of complexity that these tech innovations can bring.

“Everyone is waiting for someone to initiate [investing in a new company],” he points out. “So we want to be the one who is leading this investment into deep tech.”

One of the solutions to this matter was having a team of partners with a strong background in engineering.

“I myself was an engineer and have been working at DSTA for the past decade,” Chng says.

“We can properly see if this were a legitimate technology or not; not just some person drawing some graphs and claiming what it can do. We can also evaluate the risk associated with it, validate it, and make sure that it can grow,” he elaborates.

Another problem faced by deep tech startup community is related to the matter of communications.

“Unless they have gone through some more rigorous programmes, most people often struggle to understand when deep tech startup founders are presenting their ideas. [These founders] sometimes need help in articulating their ideas and understanding the commercial sector,” Chng notes.

Moving Forward

Some of Cap Vista’s portfolio companies include space tech startup Aliena and Artificial Intelligence (AI) company Seventh Sense.

As part of its effort to support the deep tech ecosystem, the firm had recently teamed up with Singapore Space Tech Limited (SSTL) to launch Project Cyclotron, a space tech accelerator programme.

“The intention is to educate and to help the startups in marketing and building their business plan. That way, they can focus more on building their technology,” Chng says.

In the near future, Cap Vista is looking forward to focus on bringing more investors to the programme. It also aims to expand the programme overseas.

“It has a very bottom-up approach in building it,” Chng closes.