Promising start-ups here can now apply for special funding earmarked for them in the Fortitude Budget, Singapore's fourth Budget this year.
Deputy Prime Minister Heng Swee Keat said in his speech on May 26 that $285 million would be allocated to help start-ups sustain innovation and entrepreneurship activities, gain access to credit, and bridge the financing gap they face amid the coronavirus pandemic.
The Special Situation Fund for Start-ups (SSFS) will be administered by EDBI, the corporate investment arm of the Economic Development Board, and Seeds Capital, the investment arm of Enterprise Singapore, they said in a joint statement last Friday.
Under the scheme, EDBI and Seeds Capital will invest in selected start-ups with private sector co-investors in a one-to-one ratio. The scheme will end when the funds are fully committed or by Oct 31, 2021, whichever is earlier.
This is not the only scheme rolled out to help start-ups so far.
Earlier this year, some $300 million was set aside to help deep-tech start-ups under the Startup SG Equity scheme, in which the Government and qualified third-party investors are co-investors.
The SSFS will support early-to late-stage innovative start-ups, though EDBI will focus on late-stage start-ups with larger funding needs and a wider employment base, while Seeds Capital will focus on the early-stage ones. Applications for the fund will be assessed on a case-by-case basis.
The start-ups should be incorporated as private limited companies with their headquarters and key value-added activities in Singapore.
EDBI and Seeds Capital are looking to start-ups from diverse sectors to apply. The start-ups should possess strategic capabilities like technology and innovation competencies or sustainable competitive advantages that can contribute to Singapore's national priorities.
EDBI president and chief executive officer Chu Swee Yeok noted that in the current climate, even start-ups that were doing well before the pandemic could have cash-flow difficulties.
"SSFS will allow Singapore to build on the momentum of our thriving start-up innovation ecosystem. We look forward to working with partner funds to support technology start-ups so that they can continue to execute their growth plans to build strategic capabilities in Singapore, and continue with their innovation activities and expansion plans to capture new market opportunities," she said.
Seeds Capital chairman Ted Tan said that while the SSFS was developed to support promising start-ups during these difficult times, it is important to ensure the funds are directed at viable start-ups.
"Involving private sector co-investors will double the deployable capital, and ensure that only start-ups with strong growth potential are supported. Collectively, the SSFS will enable these companies to continue their early product development and innovations to build a strong foundation for growth," said Mr Tan, who is also Enterprise Singapore's deputy chief executive officer.