As part of Singapore’s Fortitude Budget, the nation-state’s fourth fiscal stimulus announced by the government in a parliamentary session back in May, a US$205 million (S$285 million) boost that was set aside for innovative startups can now be accessed.
Termed the Special Situation Fund for Start-ups (SSFS), the fund aims to aid startups struggling amidst the pandemic by providing a fiscal push to allow innovation and entrepreneurial activities to continue. The funds will be co-administered by EDBI and Seeds Capital who will work with co-investors from the private sector who will match investments in equal value for selected startups. The initiative will run so long there is funding to utilise, or by 31st October 2021.
A similar scheme meant for startups was announced earlier in the year, but unlike the Startup SG Equity initiative which specifically aid startups with deep-tech capabilities, the SSFS targets early- to late-stage startups from diverse industries who demonstrate promising trajectories. Applications by late-stage startups will be managed by EDBI, while Seeds Capital will manage startups in the early-stage.
Some of the qualities that will be assessed are whether the startup has technological and innovative capabilities, or possess a competitive edge that can value-add to Singapore’s national priorities. Other qualifying attributes include being a private limited company headquartered in Singapore, possessing considerable innovative or intellectual property content that is created or owned in-house, and the ability to show a commercially sustainable business model.
To add, interested startups should also look into how they can prove their potential for expansion within their target market as well as across international arenas. On the management front, startups should have a committed and competent management team who possess a deep understanding of corporate governance and whose experience shows relevance to the startups’ goals.
With investors and venture capitalist firms exercising prudence with their investments amidst the COVID19 background, many startups would find it challenging to raise capital and inevitably run into cash-flow problems.
EDBI Chief Executive Officer acknowledges these challenges and shared that “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, continue with their innovation activities and expansion plans to capture new market opportunities.”
Seeds Capital Chairman Ted Tan further adds that although funding is crucial to support startups during these times, it is equally important that these resources are channeled to the right recipients. Commenting on partnering with private investors for the initiative, Mr Tan, who is also Deputy Chief Executive Officer of Enterprise Singapore shared that “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.”
Interested startups who seek SSFS funding are to note that their applications should be supplemented by a business plan, financial statements, cash flow projections, preliminary company information, manpower information and plans, as well as details of current interest from potential co-investors (if applicable).
With companies in the region making Singapore their choice location for its base – such as the newly merged Ayannah Global – it is a testament to the country’s healthy entrepreneurial landscape and potential for growth. Local startups can look forward to tapping on the SSFS along with other state-supported schemes with renewed vigor as they strive to thrive and overcome the challenges brought about by the pandemic.
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