Temasek, Singapore’s state-owned investment firm, is scaling down its exposure to early-stage startups following major losses, including a $275 million write-down linked to the collapse of FTX.
The sovereign wealth fund, owned by the Ministry of Finance, is now prioritizing risk reduction in response to multiple failed investments and tighter financial conditions.
FTX collapse triggers strategic shift
Temasek saw a big shift because of the FTX disaster. The fund was one of the main institutional players who had put money into the crypto exchange that has now closed which was known as a leading platform for digital assets. When FTX failed, Temasek erased its entire $275 million investment, reduced employee wages and was questioned about the process it followed. Other large firms such as SoftBank and BlackRock reported huge losses and SoftBank lost $100 million as a result. Financial Times reports on sources stating that since then, Temasek has abandoned purchasing shares in unlisted companies and has shifted toward other strategies.
Early-stage exposure drops sharply
One can see the pullback clearly from the numbers. Among 82 different early-stage companies, Temasek spent $4.4 billion in 2021. That number plunged to only $509 million, coming from just 11 different investments by then. The decision was prompted by another recent event: eFishery, an agritech from Indonesia, lost a lot of value after accusations of fraud came out. Now, the fund chooses to act cautiously and is careful when it invests directly. Emphasis on startups had dropped off substantially and resources such as venture capital are now given at a much lower level.
Crypto investments abandoned since 2024
Temasek’s exit from the crypto sector became more pronounced after its loss with FTX’s native token. Although the fund recorded a 156 percent return across all crypto VC token investments, the reputational damage from FTX was substantial. Temasek’s crypto portfolio had included high-profile names such as Partior, Animoca Brands with a $110 million contribution, and ConsenSys in a $450 million round. Indirect exposure also extended to NFT projects like Authentick through the Menyala VC fund. The fund made its final crypto-related investment in July 2024 and has since avoided digital assets entirely. Despite this, its overall crypto involvement represented a small portion of its $300 billion portfolio.
Temasek’s pivot aligns with a broader downturn in venture capital activity across the digital asset space, as investor sentiment remains cautious.