From my view both as an entrepreneur and head of the Infocomm Investments‘ fund, Singapore Government’s support has been crucial in jump-starting the start-up ecosystem and helping businesses grow.
The Prime Minister’s Smart Nation vision will see the government pulling all the key stakeholders of an ecosystem – big corporates, start-ups, risk capital, researchers and academics – together.
They will tackle the important shared global challenges arising from the inevitable realities of an ageing population and urban density. This is especially true in areas ranging from tele-healthcare to self-driving vehicles, where global tech builders can use Singapore as their living lab to trial exciting innovations.
In particular the government supports entrepreneurs in these five ways:
1. Access to Capital
Singapore has rolled out a series of funding schemes to help start-ups at different stages of growth. These grants are useful in helping start-ups to grow, build their solutions and access markets, while stretching their runway to succeed. To complement these schemes, the government actively connects start-ups with mentors and plug them into networks to help them grow.
- The ACE Start-up Grant (S$50K) gives seed funding for early stage start-ups.
- i.JAM (S$50K-200K),Technology Enterprise Commercialisation Scheme (S$250K-500K) provides funding for seed/early stage start-ups to demonstrate proof of concept/value of its solutions.
- iPACT gives funding for start-ups to develop and position themselves as a solution supplier to larger corporates, and gain market access in the process.
- Market Access Incubation Programme, Market Readiness Assistance provides funding for early/ growth stage start-ups in overseas expansion.
2. Policies and Procedures
Regulations can make or break a start-up. In this aspect, Singapore has been forward looking in clearing the way for innovations to happen, and yet measured so that the associated risk can be managed.
The fintech area, which is all the rage right now, is a good example. Fintech solutions such as P2P money transfer and crowdfunding can be exciting, but they also carry risks, including breach of sensitive data and scams through unregulated funding. Nevertheless, the government has been very open to provide a conducive regulatory environment for these innovations to be developed.
The government has adjusted its policies to allow financial institutions to launch new ideas without needing its endorsement so long as the institutions’ internal due diligence is met.
Another initiative has been to roll out “sandboxes” where innovative solutions can be launched and tested within controlled boundaries. The intention is to create a safe space for innovation so that consequences of failure can be contained.
We see more fintech start-ups coming up, and financial institutions being active in driving innovation. Already, the Singapore banks, DBS and UOB, have partnered Infocomm Investments to launch their own accelerators at the one-stop start-up facility BASH, and we can expect more fintech start-ups and solutions to come through these programme.
3. Public Private Partnership
The Singapore government has also proactively engaged the private sector, particularly in co-investments to open up start-ups’ access to smart money, and tap on the private sector to take the lead on investments.
- Through SEEDS, government co-invests 1-1 with third party investors into start-ups (seed/ early).
- Through TIS, government invests up to 85% into the start-up (early) with the remaining invested by selected private technology incubator.
- Through SSA, government co-invests 1-1 with selected accelerators, targeting strategic and nascent verticals such as medtech and cleantech.
- Through ESVF, government co-invests with selected VCs into start-ups (typically series A and above). There is S$60M of public funds available for co-investment.
Big corporates also play an important role in a successful innovation and entrepreneurial ecosystem. The government has encouraged companies to work with start-ups to come up with new ways to disrupt traditional business models, or even set up their own innovation labs or ventures.
Big corporates can help with building young tech talent and capabilities in Singapore, through partnership with the government. For example, Microsoft partnered with IDA through the “Code for Change” programme to develop computational thinking skills in up to 1.2 million individuals, of whom up to 500,000 will be young people.
4. Create and Manage Competition
It can be tough for start-ups to get noticed and compete for contracts. To give young and promising start-ups a boost, the Infocomm Development Authority (IDA) is providing start-ups with accreditation through an independent third-party evaluations of the companies.
Accredited start-ups will gain more opportunities for their solutions to be showcased and eventually be considered first for government and large enterprises projects.
Just in the first year of its running, these start-ups had access to about S$20 million worth of projects, including 125 projects from 50 government agencies. Such efforts help to position start-ups to win projects for traction/ growth.
5. Overseas Channels
Lastly, Singapore has been establishing itself as a node on the global network as start-ups increasingly take on a regional/ global view of their market. In regions where markets and cultures are fragmented (e.g. Asia), the usefulness of such overseas channels cannot be understated.
Infocomm Investments has been successful in this area with its strong regional networks (e.g. APICTA) that links it with 15 countries in APAC. Global start-ups planning to enter Asia can join the upcoming start-up exchange programme to locate in Singapore for a period of time and build inroads to overseas regional markets. Likewise, local start-ups venturing into the US and Europe can tap on Infocomm Investments offices in San Francisco and London, and its overseas partners to expand overseas.
Start-ups looking to grow in Singapore/Asia should go to Clinic@BASH for advice or touch base with Infocomm Investment to keep abreast about the latest community happenings. Singapore wants to grow the best startups in the world, and will provide the funding and support to do so.