Funding for Tech Startups in Singapore
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Where to get funding for a startup business?
The Singapore government is arguably the most advanced in the world in terms of developing the IT industry. Local authorities are allocating tons of money for grants and support for business initiatives to create an analog of Silicon Valley here.
This attitude is largely facilitated by the almost complete absence of political struggle and elections, which allows the government to look far ahead. The state purposefully selects the most talented minds with the help of a developed scholarship program and issues a Singapore entrepreneur grant.
There are so many different programs and government initiatives in Singapore that it is easy for a beginner to get confused. Besides, many programs are designated by abbreviations, the meaning of which is not obvious to a foreigner. To help those starting their own business in Singapore, you need to read a shortlist of spring startup grants, government programs to support startups and small businesses with a description of their content and features. Some of these schemes are designed to support companies with a predominantly Singaporean capital, but foreigners can also count on help.
The variety of programs is explained by the general strategy of the government aimed at developing the country in the face of the challenges of the new era.
Startup and Grants
ACE Startup Grants
Action Community for Entrepreneurship ACE was organized as a government organization dedicated to small business development in Singapore. Currently, management has been transferred to private structures, but the state still funds the programs. One of the main programs is allocating a Singapore entrepreneur grant in the amount of up to 50 thousand Singapore dollars (38 thousand US dollars) to a business, subject to investing their funds in the same amount.
However, to participate in this grant program, you must meet several requirements, one of which is lack of entrepreneurial experience; that is, the applicant must be a beginner entrepreneur and not have enterprises registered in Singapore.
Where to get funding for a startup business? The Infocomm Development Authority (IDA) initiative aims to help startups enter guaranteed contracts with large companies, which tend to avoid cooperation with small businesses due to their potential unreliability. After all, as you know, any startup has a high risk of going bankrupt. Small businesses certified under the program include Kai Square, V-Key, and Tagit. At one time, discussions arose in the startup community about whether it was worth participating in this program at all, given the tedious registration procedure. But for mature technology companies, this startup funding Singapore program is quite acceptable.
A*STAR Scientist Support Program
A*STAR is a government agency that oversees 18 research and development projects. Although the agency does not directly support the spring startup grant, the scientists under its patronage are valuable talent for tech startups. After two years of work at the A*STAR research institute, an employee can choose one of the areas of further activity, including work in the private sector.
Initial Venture Funding Fund (ESVF)
This is a program run by the National Research Foundation. Venture funds are attracted to participate in the program, which invests in startups on the condition of equal co-financing. It is designed for pre-seed startups. Within the framework of the program, it is planned to attract investments totaling $48 million.
Development and mentoring programs
This is a program initiated by the Media Development Agency. It is a spring startup grant scheme where budget funds are distributed among startup projects through a network of government-accredited private business incubators. Funds are usually disbursed in two tranches. The first tranche is the initial financing stage up to S $50,000 (the US $38,000). If all the criteria are met, a Singapore entrepreneur grant can expect to receive an additional S $200,000, with half of the same amount contributed by a third party. The i.JAM program, however, has been the subject of intense debate over the effectiveness of this method of developing a startup ecosystem. However, some incubators working under the program, including NUS Enterprise and Crystal Horse Investments, have proven themselves well.
JTC LaunchPad @ one-north
LaunchPad, also known informally as Block 71, is a startup cluster that can house up to 500 different businesses. In addition, investment companies, business incubators, business accelerators, and other organizations of the startup ecosystem are based here. The cluster is jointly managed by the Industrial Development Agency (JTC) and the Business Promotion Group (ACE). LaunchPad will soon launch a concierge service to assist first-time startups in Singapore.
MOOC Pilot Data Science Course
The course is designed for small businesses, but it is the CEOs of startups who can learn valuable information about data processing and analysis. This online/offline program is sponsored by the Information Society Development Agency of Singapore (IDA) in partnership with Coursera. The training is very popular, so the second batch of trainees scheduled for next year has already been completed.
Productivity and innovation development programs
Where to get funding for a startup business? PIC, this initiative is not a startup support program. It is a tax deduction and cost recovery scheme for small and medium-sized businesses that invest in productivity improvements and implement new technologies. As part of this program, many restaurants have introduced e-menus and improved ordering systems. And startups use that money to buy laptops and other equipment. But it is perhaps most beneficial for recovering R&D costs, and research can be conducted in Singapore and overseas.
SSA Sector Specific Accelerator
The SSA program is run by the Singapore government agency SPRING, which specializes in supporting manufacturing enterprises. It is a funding scheme for niche industries such as medical device manufacturing or new cleaning technologies. This year, the government announced that up to S $60 million would be allocated through the program to support startups in the medical device industry. Half of these funds will be allocated from the budget.
SPRING Startup Development Program
This is another one-to-one co-financing program; one dollar of investment must be invested in one dollar of own funds. The program provides the enterprise with up to S $1 million (the US $770,000) in addition to funds from outside investors. Initially, SPRING’s investment is typically limited to S $300,000 (the US $232,000).
TECS Technology Enterprise Commercialization Program
NECS is a startup R&D funding program. The goal of the program is to help develop technologies that can subsequently enter the market. The program implies the allocation of two types of grants, depending on the degree of technology readiness. Overall, a startup can receive up to S $750,000 (US $579,000).
TIS technology incubation program
This is another startup funding Singapore program launched by the National Research Foundation of Singapore to support early-stage startups. The program provides co-financing of projects with the involvement of venture capital. The company’s co-financing can be up to 85% of the capital investment of the venture investor or up to 500 thousand Singapore dollars (385 thousand US dollars). Within three years, the investor has the opportunity to buy out the share of the National Research Fund.
Tourism Technology Foundation
The fund, established by the Singapore Tourism Board (STB), provides reimbursement of up to 60% of the organizational costs of Singapore-based businesses developing new technology products for the tourism industry.
Human Resources Development Agency (WDA) subsidies
This subsidy program does not directly support startups either but ultimately plays a positive role. The State Agency for Human Resources Development reimburses up to 90% of the cost of training employees at accredited training centers, including the Institute of Systems Science and the Hyper Island education project.
Some of these programs involve direct financing of startups from the state budget, while others are implemented with investor money.