Criteria to Guide Government Funding Support for Startups

Ms Foo Mee Har asked the Minister for Trade and Industry (a) what criteria are used to guide Government funding support for startups; (b) how are the investments distributed across various sectors; and (c) how much is invested in deep-tech startups.

Startups are an important driver of innovation and enterprise in our economy.

The Government provides funding support to Singapore startups across different stages of their development.

In the early stages, Startup SG Founder provides capital grant to first-time entrepreneurs with innovative business ideas, while Startup SG Tech provides grant support for Proof-of-Concept and Proof-of-Value commercialisation of innovative, proprietary technologies. At this point, the uniqueness of the idea or product will be the main consideration.

For startups that are more mature and ready to receive institutional investment, funding support is provided through Startup SG Equity which co-invests with independent third-party investors. The private investors help assess the startup's commercial viability and the strength of its business model and management team. These co-investments cover both general tech and deep tech startups, across a range of sectors and domains, such as Advanced Manufacturing and Engineering (AME), Health and Biomedical Sciences (HBMS), Urban Solutions and Sustainability (USS), and Services and Digital Economy (SDE). Between 1 April 2017 and 31 October 2018, the Government has co-invested in a total of 62 startups under the Startup SG Equity scheme. The Government's funding of S$43.8 million for these 62 startups catalysed S$50.3 million of private sector monies from their appointed co-investment partners. Around half of these investments were deployed into deep tech startups, and the rest into general tech startups.

At Budget this year, the Government has also announced the National Research Foundation (NRF)-Temasek Intellectual Property (IP) Commercialisation Vehicle, which will co-invest in startups whose business models are underpinned by intellectual property generated from publicly funded research. NRF has committed to invest $50 million and Temasek has committed to co-invest at least $50 million into Singapore-based early-stage high-tech companies.

Growing a conducive environment for startups goes beyond funding support. Startups also need access to mentorship, talent, local and global networks, co-innovation platforms and infrastructure, in order to build their capabilities and grow. Hence, besides funding, the Government has put in place support to meet the non-financing needs of startups. Under Startup SG Infrastructure, startups have access to spaces that they need to grow, experiment and flourish. The strong network of startups, incubators and venture capitalists at LaunchPad@one-north generates opportunities for collaboration and accelerates the growth of startups. Under Startup SG Accelerator, the Government provides support to incubators and accelerators to take on the role of catalysing growth opportunities for high-potential startups through their programmes, mentorship and provision of resources. The Government also works closely with partners, such as the Action Community for Entrepreneurship (ACE), SGInnovate and our universities to support the growth of startups in Singapore.

Through these efforts, Singapore's startup ecosystem is becoming more vibrant. Venture funding activity in Singapore has ramped up, from 80 deals worth US$136.4 million in 2012, to 174 deals worth US$1.37 billion in 2017. The Government will continue our efforts to make sure that we have an enabling, pro-enterprise environment for startups and that Singapore is the place of choice for startups in Asia.