Singapore is a prominent hub for startup activity for many reasons, including the fact that it is the easiest country to setup a business and it possesses excellent technology infrastructure. One major contributor to the burgeoning clusters of startups is the abundance of grants and early-stage venture capital.
There are very few places in the globe where the private and public sector puts so much into the startup industry. SPRING, an agency responsible for helping Singapore enterprises grow, has since supported more than 150 projects totalling more than S$50 million. In hopes of helping local ventures go global, Singapore’s government gives out substantial grants to promising entrepreneurs up to the tune of S$1.5million each.
Specifically for this fund, the only conditions are that the startup has to be based in Singapore and it has to secure venture capital funds or personal investment first; after that, the state will match it dollar for dollar. Having someone vet the company – like Jungle Ventures, an approved co-investor with SPRING and National Research Foundation – is a wise move. As venture capitalists are famous (or infamous) for their meticulousness and scepticism, only the cream of the crop will make it pass their checks and therefore worthy of taxpayers’ investment.
There are other schemes in the market to assist startups as well:
- The ACE program: SPRING matches about $50,000 to about $21,500 startups raise on their own.
- iJams reloaded: Administered by Media Development Authority (MDA), iJams has two phases to its funding scheme. MDA works with private or institutional incubators to administer this fund. In the first phase, MDA will match $50,000 to about $10,000 that the founders or the incubator puts up. If the milestones are hit and the startup is eligible for phase two, MDA will match $100,000 to $100,000 raised by the founders or the incubator.
- Many more.
While there is sufficient money for innovative ideas to kick-off into fledging businesses, the global Series A crunch is also apparent here. It is still not a piece of cake to be a startup. It is easy to get seed funding and even series B/C once you get monetisation, but the critical Series A is still very hard to secure.
The current state/private seed model is a great way to help startups get on their feet and improve the eco-system. This is rather unique to Singapore, as very few countries sees state involvement in helping new businesses out with capital injection. The process for applying for these grants is relatively painless in terms of paperwork and stock. More and more venture capitalists (IMJ Fenox, 500 Startups, etc.) are moving in the city-state for the opportunities. With the government and venture capitalists pitching in, I feel Singapore is in a good position to bridge the gap from wishful startups to global enterprises.