SINGAPORE - Social entrepreneurship is steadily taking roots in Singapore, raising hopes it will solve some community problems that are too narrow in scope to attract private investment.
However, early-stage support from the mainstream business community can help de-risking investments into these socially conscious ventures, as well as attract more investors, eventually resulting in greater social impact.
Social ventures are not the same as philanthropic organisations or charities. They are in essence for-profit businesses that are dedicated to addressing a problem an unserved or underserved group of people are facing.
By doing so, they aim at creating a lasting or transformational change in societal and business norms.
The Singapore Centre for Social Enterprise (raiSE) defines social enterprises (SE) as business entities set up with clear social goals, management intent and resources allocated to fulfil their social objectives and provide business solutions to address unmet and emerging social needs and gaps.
raiSE was set up in 2015 as a public-private joint initiative to raise awareness on social entrepreneurship and boost support for social enterprises in Singapore.
At its inaugural impact investment conference, which was held on March 30 at Grand Copthorne Waterfront hotel, raiSE featured social enterprises that have successfully integrated business and social impact. raiSE provided them with funding and capability building support which acted as a catalyst for subsequent rounds of funding.
For instance, online health platform Jaga-Me started with a simple mission - to make universal healthcare accessible while not compromising on quality of life.
The online platform worked with hospitals and beneficiary groups to bring professional medical services to patients in the comfort of their own homes.
Since becoming a raiSE member, the firm has not only managed to expand its beneficiary list, but also its investor list and connections.
Mr Julian Koo, co-founder of Jaga-Me, explains that the raiSE Impact Finance support was extremely helpful as there are not many options for social enterprises to secure capital investment.
He noted that, while charities could fund-raise through philanthropic groups and from the public, SEs are mainly reliant on revenue generated from the sale of their products and services. On the other hand, being an SE might not entirely appeal to traditional for-profit investors who assess deals solely on their revenue generation abilities.
"Capitalism is impatient that way. With raiSE, the capital is a lot more patient and they gave us the runway to validate the idea and accelerate to a point where we were getting enough traction. raiSE really helped us get to the next level in our first year and a half," said Mr Koo.
In December 2019, Alliance Healthcare Group, which is listed on Singapore Exchange's Catalist board, bought a majority stake in the digital healthcare platform start-up for about $3.5 million in cash. The deal valued Jaga-Me at $6.37 million.
But the support raiSE provides can go beyond funding. It can also foster innovation.
In 2016, brothers Stanley and Ivan Lim realised there was an increasing trend of blue-collar jobs being advertised online, even as most workers were still using traditional means to source for jobs, such as looking at newspaper classifieds. Harnessing 20 years of experience in the recruitment industry between them, they founded Findjobs to explore ways of connecting online job advertisements with offline job seekers.
In 2018, raiSE helped Findjobs transform the way that employment seekers access online job ads on-the-go through smart job kiosks, in addition to mobile phone apps.
Mr Ivan Lim, Findjobs' chief product officer, said: "Before joining raiSE, I did not think of creating kiosks. But through their networking events, the exposure to the social service offices (SSOs) and their beneficiaries inspired us to transform our existing mobile applications into standalone kiosks to make it easier for low-income job seekers without smartphones or data plans to access jobs."
raiSE supported the development and deployment of these smart job kiosks, and helped place them strategically in places frequented by beneficiaries. Today, these kiosks are available at 30 locations across the island.
Findjobs chief executive Stanley Lim said: "Without raiSE, we wouldn't have been able to expand as quickly. raiSE's investment allowed us to validate our product rapidly and attract partnerships from other agencies, which enabled us to create even more impact."
Senior Minister and Coordinating Minister for Social Policies Tharman Shanmugaratnam believes investors with greater risk absorption capacity, such as philanthropic foundations and pure business ventures like family offices, can come in to de-risk investments and crowd in a lot more private capital in social enterprises.
"All this is doable; it requires catalysts and leadership. It requires that people see success on the ground, because success spawns more success," he said at the raiSE conference.
He went on to stress that the economic health of a country and the social health of its people depend on each other.
"More businesses are now recognising that they are less likely to do well in the long term if they short-change our collective future.
"We have to increasingly look at business missions and our economic policy objectives as resting on social health, and recognise that we are not going to succeed in our social agenda without a vibrant economy," he said.