Temasek Holdings, Singapore’s state-owned investment giant, is significantly scaling back its exposure to early-stage companies following a series of high-profile investment setbacks and tighter global financial conditions, sources familiar with the matter say.
The strategic pivot marks a notable shift for one of the world’s most prominent investors, which has grown increasingly cautious amid rising interest rates and challenges faced by start-ups in securing funding or going public. The move follows hundreds of millions of dollars in losses from failed ventures, most notably its $275 million stake in collapsed crypto exchange FTX and its investment in Indonesian agritech firm eFishery, which is under investigation for financial misconduct.
“Temasek’s investment portfolio has taken some pretty big hits in recent years,” said a fund manager briefed on the group’s strategy. “They are changing their approach to get more diversity and also reduce the volatility of returns.”
Data from Tracxn shows Temasek’s early-stage investment plummeted from $4.4 billion in 2021 to just $509 million in 2024, with a mere $70 million committed so far in 2025. First-round investments in unlisted companies also dropped sharply, from 82 in 2021 to just 11 last year.
While Temasek will continue indirect start-up investments through venture capital funds, the firm is now focusing its direct investments on more mature companies approaching public listing, aiming for fewer but larger bets with lower risk profiles.
Founded in 1974 to manage state assets, Temasek has transformed into a global investor with a portfolio valued at approximately $300 billion. Unlisted firms currently make up more than half of the group’s holdings. However, performance has lagged global benchmarks—Temasek posted just a 2% return for the fiscal year ending March 2024, compared to a 28% gain for the S&P 500.
The firm has publicly acknowledged the risks inherent in early-stage investing. In a statement, it said: “We are cognisant of the risks and challenges early-stage companies face and accept the binary risks that come with investing in them… We have seen a market pullback in investment flows into early-stage investing since 2022 and, as a result, have adopted a more cautious approach to new investments.”
The pullback comes in the wake of a review following the FTX collapse, which prompted Singapore’s Prime Minister and then-Finance Minister Lawrence Wong to criticize the reputational damage. Temasek responded by cutting the pay of the investment team and senior executives involved.
Besides FTX and eFishery, other troubled investments include Zilingo, Locanabio, Pear Therapeutics, and Tessa Therapeutics. However, the fund has also seen success stories such as Alibaba, Adyen, DoorDash, and Zomato-owner Eternal.
Going forward, Temasek has capped early-stage exposure at 6% of its portfolio—split roughly evenly between direct stakes and venture fund allocations—as it recalibrates for a more stable investment climate.
