An employee is silhouetted against the logo for the Government of Singapore Investment Corp. (Photographer: Munshi Ahmed/Bloomberg News)

Singapore's GIC Says Becoming Skeptical of Technology Valuations

(Bloomberg) -- Singapore’s sovereign wealth fund, which backed some of China’s biggest technology startups, is becoming more selective about investments in the sector amid soaring valuations.

An influx of investors of all stripes, from venture capital to sovereign wealth and hedge-funds, has driven up valuations of many unprofitable startups, Jeffrey Jaensubhakij, group chief investment officer of GIC Pte., said in an interview.

"It’s just a much more crowded, much more well televised space, and you just have to be more skeptical,” he said. “The question we always ask going into one of these investments is, ‘Can you see a path to profitability quickly? How much competition will come up so that you may be forced to extend that period of cash burn?’"

The fund has been investing in global tech companies since its founding in 1981 and scored big as an early backer of Alibaba Group Holding Ltd. and Xiaomi Corp., which went public this week. GIC’s other investments include Ant Financial, Flipkart Online Services Pvt. and Affirm Inc. The fund is also an active investor in publicly traded technology, media and telecommunications companies.

GIC is examining opportunities in emerging markets, led by China and India, where it sees a wave of innovation and where customers are adopting technology at a faster pace than developed markets.

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