THE S$285 million Special Situation Fund for Startups (SSFS) will be administered by EDBI, the corporate investment arm of Economic Development Board, as well as Seeds Capital, the investment arm of Enterprise Singapore, to provide financing support for promising startups based in Singapore.
Under this scheme, EDBI and SEEDS Capital will invest in selected startups with private sector co-investors on a 1:1 basis.
It will end when the funds are fully committed or by Oct 31, 2021, whichever is earlier.
The scheme, announced in Deputy Prime Minister Heng Swee Keat's Fortitude Budget speech on May 26, will provide “time-limited funding support to help high-potential startups sustain their growth momentum despite the Covid-19 pandemic”, EDBI and SEEDS Capital said in a joint statement on Friday night.
It was introduced because some startups are facing challenges in raising capital, even with the financing support rolled out in past Budgets, Mr Heng said in his speech then.
The S$285 million SSFS is in addition to the S$300 million set aside in the Unity Budget, under the Startup SG Equity scheme to help deep-tech startups gain better access to capital, expertise and industry networks.
The SSFS will support early to late-stage innovative startups with strategic capabilities that can contribute to Singapore’s national priorities, said EDBI and SEEDS Capital.
EDBI will focus on late-stage startups with larger funding needs and wider employment base while SEEDS Capital will focus on early-stage startups.
Chu Swee Yeok, chief executive officer and president of EDBI, said: "The SSFS will allow Singapore to build on the momentum of our thriving startup innovation ecosystem."
"We look forward to working with partner funds to support technology startups so that they can continue to execute on their growth plans to build strategic capabilities in Singapore, continue with their innovation activities and expansion plans to capture new market opportunities," Ms Chu added.
Startups will be assessed on a case-by-case basis. They should be incorporated as a private limited company with its headquarters and key value-added activities in Singapore.
The startups should also possess strategic capabilities such as technology and innovation competencies and/or sustainable competitive advantages, according to the joint statement.
Other business attributes the startups are expected to have include: substantial innovative and/or intellectual property content developed or owned in-house; strong corporate governance; a clear value proposition and potential for scalability; a commercially-viable business model as well as a committed and capable management team.
The Business Times wrote last month that extra care must be taken to ensure only the most deserving startups get funded under this S$285 million measure, as a poorly executed scheme could lead to weak companies having their lives prolonged.
Ted Tan, chairman of SEEDS Capital and deputy chief executive of Enterprise Singapore, said the SSFS was developed to support promising startups who needed to continue their business development and fundraising in these difficult times.
"While we do this, we want to ensure that the funds are directed at viable startups," Mr Tan noted.
"Involving private sector co-investors will double the deployable capital, and ensure that only startups 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," he added.
Interested early-stage startups can apply for the funding via firstname.lastname@example.org, while late-stage startups can apply via email@example.com.