Startup Grants & Funding Sources in Singapore

Singapore is a very attractive place for entrepreneurs to set up a business. Besides the low tax rates and the ease of doing business, another important factor that attracts entrepreneurs from around the world to the country is the multiplicity of financing sources for startups. This article will introduce you to the private and government sources of funding for startups.

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If you decide to incorporate your startup in Singapore, the government offers several attractive grants and funding schemes that help grow a business through its various early stages. In addition to the government support, there are many angel investing networks, venture capital firms, private equity firms, startup incubators and accelerator programmes that assist entrepreneurs in raising capital.

This article will discuss the funding sources available to entrepreneurs who wish to start a business in Singapore.

Government Schemes

Government agencies in Singapore provide the following cash grants and equity financing schemes to local startups in the country; startups are eligible for these grants and schemes on the basis of qualifying criteria set by the government.

Startup SG

The Standards, Productivity and Innovation Board Spring (SPRING) has consolidated its previous startup assistance schemes under one program which is now called Startup SG. The goal of Startup SG is to provide Singapore-based startups with access to funding sources and mentorship programs and thereby help turn innovative business ideas into thriving companies. Under Startup SG, qualifying startups can access cash grants, equity financing, and business loans. The following provides an overview of the funding programs offered by Startup SG:

Startup SG Equity

Startup SG Equity is an investment fund managed by SPRING Seeds Capital and SGInnovate. Under the Startup SG Equity scheme, the Singapore government will co-invest with 11 private investment partners in startups that require significant capital expenditure and may take longer to be commercially viable.

For startups that are improving existing technologies, the Singapore government will provide 70% of the funding in an initial investment round of S$250K. Thereafter, the Singapore government will invest S$1 for every S$1 invested by private investors up to a cap of S$2 million.

For startups classified as “deep tech”, the Singapore government will provide 70% of the funding in the initial round investment of S$500K.

Thereafter, the Singapore government will invest S$1 for every S$1 invested by private investors up to an investment cap of S$4 million.

The Singapore government describes deep tech companies as developing products based on scientific or technological breakthroughs that are unique, differentiated and hard to reproduce. Typically, the technology a deep tech startup is developing is the result of years of research and lab testing and, requires a longer period to reach market viability.

To qualify for Startup SG, startups must meet the following requirements:

  • Be a Singapore-based company
  • The core operations of the company must take place in Singapore
  • Be incorporated as a private limited company for fewer than 5 years.
  • Have paid-up capital of at least S$50,000.
  • Be able to prove substantial innovative and intellectual property
  • Have high-growth potential with clear ability to scale in the international market.
  • Have identified an independent third-party investor.
  • The business must not be involved in gambling, tobacco-related products, or any other activities which are in violation of law, or against public interest.
  • The company cannot be a subsidiary or joint-venture.

For more on how to apply, please see the Startup SG Equity page.

Startup SG Tech

This grant provides project funding for local Singapore companies to develop breakthrough technology that can disrupt current markets or create new markets. With Startup SG Tech, companies will receive funding for both Proof-of-Concept (POC) and Proof-of-Viability (POV) projects. POC projects, which are designed to test the technical and scientific viability of a new technology, can receive funding of up to S$250,000. POV projects designed to test the commercial viability of a lab-proven technology can receive up to S$500,000 in funding. Furthermore, to qualify for Startup SG Tech, companies must meet the following requirements:

  • The company must be a registered Singapore company less than 5 years old
  • The company must operate in Singapore
  • The company must have at least 30% local shareholding
  • Annual revenue must be less than S$100 million or the company must employ fewer than 200 people

Startup SG Tech offers cash grants to companies in the following industries:

  • Advanced manufacturing and robotics
  • Biomedical sciences and healthcare,
  • Clean technology (e.g. waste management solutions, sustainable energy generation)
  • Information and communications technologies
  • Precision engineering (e.g. composite technology and silicon photonics technology)
  • Transportation technology
  • Food science and technology

For more on how to apply, please see the Startup SG Tech page.

Startup SG Founder

The scheme was developed for new entrepreneurs with innovative businesses. Startup SG Founder provides up to S$30,000 by matching S$3 to every $1 raised by the startup. Along with funding, entrepreneurs also receive mentorship and business guidance from Singapore-based incubators. The program is open to Singapore citizens and permanent residents. To be accepted into the Startup SG Founder program, first-time entrepreneurs must apply through an Accredited Mentorship Partner (AMP); these include:

  • Action Community For Entrepreneurship (ACE) works with startups working in all sectors
  • Advanced New Technology Incubator works with startups specializing in hardware, robotics, and automation.
  • FocusTech Ventures works with startups in IoT, advanced manufacturing, robotics, AI, and AR/VR.
  • JCS Venture Lab works with startups in advanced manufacturing and engineering.
  • Nanyang Technological University works with startups in advanced manufacturing, health and biomedical sciences, urban solutions and sustainability, services and digital economy.
  • NUS Ventures works with startups in IoT, AI, fintech, hardware, and software.
  • Singapore Management University works with startups in fintech, cybersecurity, data analytics and artificial intelligence, Smart City innovations, transportation, and logistics.
  • QuestVC works with startups in e-commerce.
  • Spaze Ventures works with startups financial services, fintech, healthcare, education, e-commerce, logistics, big data, enterprise solutions and IoT.
  • The Finlab works with startups in fintech.
  • TNB Ventures works with startups in IoT, AR/VR, robotics and AI.
  • Trendlines Medical works with startups creating medical devices and medical technology.
  • Tri5 Accelerator works with startups in fintech, energy tech, education tech, and marketplace platforms outside of Singapore.
  • August Global Asset Management works with startups in fintech, security, medical technology, education technology, agriculture technology, and big data.

To receive the grant, the first-time entrepreneur must adhere the following conditions:

  • The first-time entrepreneur must hold or propose to hold a minimum of 30% equity in the new company.
  • The first-time entrepreneur must dedicate a reasonable amount of time to the business, not be employed full-time by another employer and must be a key decision maker in the company.
  • The first-time entrepreneur cannot have already received funding for the proposed business from another government organisation.
  • Upon approval, the first-time entrepreneur must register a private limited company in Singapore.
  • If the first-time entrepreneur has already registered a company, it must not be more than 6 months old and must have at least 51% shareholding in Singapore.

To learn more on how to apply, please see the Startup SG Founder page.

Startup Incubators

The following are Singapore government accredited incubators:

  • Action Community For Entrepreneurship (ACE) works with startups working in all sectors
  • Advanced New Technology Incubator works with startups specializing in hardware, robotics, and automation.
  • FocusTech Ventures works with startups in IoT, advanced manufacturing, robotics, AI, and AR/VR.
  • JCS Venture Lab works with startups in advanced manufacturing and engineering.
  • Nanyang Technological University works with startups in advanced manufacturing, health and biomedical sciences, urban solutions and sustainability, services and digital economy.
  • NUS Ventures works with startups in IoT, AI, fintech, hardware, and software.
  • Singapore Management University works with startups in fintech, cybersecurity, data analytics and artificial intelligence, Smart City innovations, transportation, and logistics.
  • QuestVC works with startups in e-commerce.
  • Spaze Ventures works with startups financial services, fintech, healthcare, education, e-commerce, logistics, big data, enterprise solutions and IoT.
  • The Finlab works with startups in fintech.
  • TNB Ventures works with startups in IoT, AR/VR, robotics and AI.
  • Trendlines Medical works with startups creating medical devices and medical technology.
  • Tri5 Accelerator works with startups in fintech, energy tech, education tech, and marketplace platforms outside of Singapore.
  • August Global Asset Management works with startups in fintech, security, medical technology, education technology, agriculture technology, and big data.

Angel Investing Networks

Angel investors are high net worth individuals who invest in startups at their seed stage. These investors (known as “angels”) invest in companies despite no proven success of the company’s business model. The investors invest either individually or as a group. This funding source is advantageous to startups that do not have a final business model and require quick access to capital. In Singapore, the angel networks include the following:

Business Angel Network South East Asia (BANSEA)

BANSEA is an angel investment network that was established in 2001 in Singapore. It organises conferences, workshops, etc to promote the angel investing network in Asia. BANSEA’s mission is to facilitate investment opportunities for members in early stage startups. BANSEA is open to entrepreneurs who have a great idea and require funding to establish themselves.

Business Angel Scheme (BAS)

SPRING SEEDS supervises the Business Angel Scheme (BAS) which is an equity investment scheme for Singapore-based enterprises. SPRING SEEDS partners with angel groups to invest in innovative startups. SEEDS invests a dollar for a dollar up to a maximum amount of S$1.5 million. The business angel group and SEEDS will take an equity share in the startup in proportion to their investment.

Singapore Angel Network (SGAN)

Singapore Angel Network (SGAN) is the investment arm of Thakral Group of Companies in Singapore. SGAN invests in startups usually at the later stage of their finance requirements. This angel network does not target any specific industry and invests in various business sectors in Singapore and other countries as well.

Venture Capital Firms

Venture capital funding is often suitable for startups or late stage businesses that have a large capital requirement.

Following are the venture capital firms that invest in Singapore startups:

  1. Singtel Innov8: This venture capital firm is a wholly owned subsidiary of Singapore’s largest telecom company, Singtel. The firm invests in early-stage startups in Asia-Pacific, US, and Europe. The firm invests in digital media, internet applications, technology sector etc.
  2. KK Fund: Singapore-based KK Fund invests in seed stage startups specialising in internet and mobile companies in Southeast Asia, Hong Kong, and Taiwan.
  3. East Ventures: A venture capital firm based in Tokyo, East Ventures invests in startups based in Southeast Asia that focus on consumer internet and mobile products.
  4. Golden Gate Ventures: This global venture capital firm targets startups based in Southeast Asia that create internet products.
  5. Fenox Venture Capital: Based in Silicon Valley, this firm actively invests in Singapore. It invests in emerging technology startups and also assists entrepreneurs in North America who wish to expand their business globally with a base in countries such as Singapore, Thailand, and Indonesia etc.
  6. IMJ Investment Partners: The Singapore-based firm invests in startups in the country as well as other Southeast Asian countries. The firm invests in internet, mobile and software companies. Besides Southeast Asia, the firm invests in startups based in Japan and the United States.
  7. Ardent Capital: A venture capital firm that invests in seed and early stage ventures. Ardent capital invests in technology companies in Southeast Asia. The firm focuses on specific regions such as Thailand, Singapore, Malaysia etc.
  8. Jungle Ventures: Based in Singapore, this firm invests in the early stage of startups in Asia Pacific markets. The firm focuses on investments in technology, software, e-commerce etc and considers businesses that have the potential to grow in Asia. The firm also organises incubation programmes for Singapore startups.
  9. Sequoia Capital: This venture capital and private equity firm focus on financial, healthcare, energy, mobile and internet startups. The firm invests in seed, early stage, and late stage startups. Besides investing in these startups, the firm specialises in incubation programmes that help in the growth of startups.
  10. 500 Startups: 500 Startups is a seed fund and startup accelerator based in Silicon Valley. The firm has funded over 500 startups and invests in Southeast Asia including Singapore.
  11. Life.SREDA: This Singapore-based venture capital firm invests in growth stage fintech companies.
  12. Singapore Venture Capital & Private Equity Association (SVCA): SVCA is a Singapore-based association established to “promote the development of the venture capital and private equity industry”. The association extends support to entrepreneurs by providing its members with the opportunity to connect with venture capitalists through events that they organize. This makes it easy for startups to connect with venture capitalists.

Private Equity Firms

Private equity investment refers to an investment made by a firm to acquire ownership of a non-public business. These firms usually invest in profitable companies which are in a high-growth stage. Private equity firms in Singapore include the following:

  1. 3V Source One Capital: 3V Source One Capital is a private equity firm that invests in sectors such as biotech, education, media, industrial, real estate, software etc. This firm caters to businesses in Singapore and specialises in investing in growth to late-stage companies. The firm also invests in companies in Greater China and the United States.
  2. Venstar: Venstar, a private equity firm with its headquarters in Singapore invests in startups at their growth and expansion stage. The firm invests in startups in Singapore, Southeast Asia, and China. Few of the sectors that the firm invests in include petrochemical, pharmaceuticals, resources, and energy etc. Besides investing in startups, the firm is also involved in the management of the investee companies.
  3. Navis Capital Partners: Founded in 1998, Navis Capital Partners invests in Asia, Australia, and Hong Kong. It has a strong presence in South and Southeast Asia which includes Singapore, Hong Kong, Malaysia, etc. Navis invests in industries such as fast moving consumer goods, food processing, industrial products, etc.
  4. AIF Capital: The private equity firm having offices in Singapore, New Delhi, Hong Kong and Beijing focuses its investment in Asia, Southeast Asia, China, and India. The firm provides capital to growth companies in sectors such as healthcare and pharmaceuticals, media and advertising, power generation, financial services, etc.
  5. Tael Partners: Singapore-based Tael Partners is a private equity firm that invests in sectors such as shipping and logistics, natural and mining resources, utilities and infrastructure, real estate development, etc. The firm founded in 2007 has offices in Malaysia, Indonesia, Vietnam, and Thailand and is one of the largest private equity firms in Singapore.
  6. L Capital Asia: This private equity firm specialises in growth capital and invests mainly in consumer product brands, lifestyle retail, lifestyle food and beverages, beauty and wellness, boutique hospitality, etc. The firm, based in Singapore, invests mainly in Asia Pacific, Southeast Asia, India, Australia and New Zealand.

Conclusion

There are many venture capital firms, private equity firms and angel investing networks available to entrepreneurs in Singapore. In addition, the government of the country has launched many schemes and grants that facilitate the growth of startups in Singapore.

Singapore being one of the best places in the world to do business, has access to investors not only from Singapore but from other parts of the world. For instance, venture capital firms such as 500 Startups, Golden Gate Ventures, Sequoia, etc also invest in Singapore startups. Singapore has emerged as a key startup hub in Asia because of its pro-business environment, efficient legal system, and stable political system.

TABLE OF CONTENTS

  1. Government Schemes
  2. Angel Investing Networks
  3. Venture Capital Firms
  4. Conclusion

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