Singapore has become one of the most attractive countries for investors to set up a business because of its business-friendly policies and supportive ecosystem for startups. The Singaporean government has shown their support for new businesses by offering grants and funding to help startups grow during their early stages of business. In the following guide we have listed the different types of startup grants and funding.
Startup SG is a scheme that provides funding and mentorship to businesses in Singapore. Under this scheme, there are various types of grants offered by Startup SG.
Startup SG Founder Grant
The first grant is for first-time entrepreneurs, the Startup SG Founder grant. This scheme provides new entrepreneurs with guidance and a startup capital grant of SGD 30,000 which matches SGD 3.00 to every SGD 1.00 raised by the startup. In other words, to receive the maximum grant of SGD 30,000, the startup must invest SGD 10,000.
The SG Founder grant is applicable to Singapore citizens and permanent residents who are first-time entrepreneurs and applied through an Accredited Mentorship Partner (AMP).
To receive the grant, first-time entrepreneurs must comply with the following conditions:
- Must hold or propose to at least 30% of the company
- Must be dedicated to the business – not be a full-time employee of another company
- Cannot already received funding from another government organisation
- The first-time entrepreneur must incorporate a private limited company in Singapore after approval.
- If the first-time entrepreneur already has a company in Singapore, it must not be more than six months old and must have at least 51% shareholding in Singapore.
Startup SG Equity
The second type of grant is the Startup SG Equity. Under this scheme, government will co-invest with qualified third-party investors into eligible startups.
For general tech startups, the government will need to invest 70% of the funding up to the first SGD 250,000 and a ratio of 1:1 up to the investment cap of SGD 2 million. For deep tech startups, the Singapore government will provide 70% up to the first SGD 500,000 and 1:1 for up to SGD 4 million. To apply for the Startup SG Equity, startups should meet the following criteria:
- Be a Singapore-based company and have core operations in Singapore
- Be incorporated as a private limited company for less than five years
- Have a paid-up capital of at least SGD 500,000
- Be able to prove substantial innovative and intellectual property for its products and/or services
- Have high-growth potential with clear scalability in the international market
- Have identified an independent third-party investor(s)
- The business must not be involved in gambling, tobacco-related product or other activities that violate the law or against public interest
- The company must not be a subsidiary or joint-venture
Startup SG Tech
The third grant is the Startup SG Tech for tech startups and provides funding for the commercialisation of innovative technologies. Startups can receive either a Proof-of-Concept (POC) grant or a Proof-of-Viability (POV) grant. The POC project tests the technical and scientific viability of new technology and will receive funding up to SGD 250,000. A POV project tests the technical/scientific viability of lab-proven technology and can receive funding up to SGD 500,000.
The SG Tech scheme offers cash grants to the following industries:
- Advanced manufacturing and robotics
- Biomedical sciences and healthcare
- Clean technology, such as waste management solutions and sustainable energy generation
- Information and communications technology
- Precision engineering
- Transportation technology
- Food science and technology
To qualify for the SG Tech grant, the company must meet the following conditions:
- Registered for less than five years and operate in Singapore
- Have at least 30% local shareholding
- The annual revenue must be less than SGD 100 million or must employ less than 200 people
Enterprise Development Grant
The next grant is called the Enterprise Development Grant (EDG). The EDG is a program by the Enterprise Singapore which helps Singapore companies grow and transform by enhancing their business foundations and strategies, improve productivity, endorse technology and expand their presence in overseas markets under three pillars: Core Capabilities, Innovation and Productivity, and Market Access.
Projects under the Core Capabilities pillar support businesses by strengthening their business foundation which include strategic brand and marketing development, business strategy development, human capital development, service excellence and financial management.
The innovation and productivity pillar support companies that want to explore new areas of growth and enhance efficiency. Areas under this pillar include product development, process redesign and automation, and the last pillar, market access encourages expanding into the overseas market and supports areas including mergers and acquisition, standards adoption and pilot project and test bedding.
The EDG provides funds of up to 70% to qualifying costs SMEs and up to 50% for non-SMEs. Qualifying costs include equipment and software, internal manpower costs and consultancy fees.
To qualify for the EDG, companies need to be registered and operate in Singapore, have a minimum of 30% local shareholding and be financially capable of starting and completing the project.
Incubators in Singapore
The next type of funding is incubators. Business incubators are funding programs designed to help startups grow by providing mentorship, technical assistance, funding and legal and financial advice. Some startup incubator options in Singapore are:
- Spaze Ventures
- JCS Venture Lab
- NUS Ventures
- The Finlab
- Advanced New Technology Incubator
- FocusTech Ventures
Another funding method is through angel investors. Angel investors are high net worth individuals or successful businesspeople who invest in early-stages businesses in exchange for ownership share in the company. These investors usually invest either as individuals or as a part of an angel network and invest in startups that have high potential in the market. Individual angel investors invest between SGD 25,000 to SGD 100,000, while group investors invest around SGD 250,000 to SGD 750,000.
Top angel investor networks in Singapore include the following:
- Business Angel Network South East Asia (BANSEA)
- Singapore Angel Network (SGAN)
- Business Angel Scheme (BAS)
Venture capital funding
The next stage of funding is through venture capital funding. Venture capital firms are investment firms that invest in late-stage startups or businesses that require a high amount of capital. They do not only provide funding but also offer advice and mentorship on operating and increasing the businesses profits. Venture capitalists usually invest in businesses that have high growth potential and profitability. Compared to the United States and Europe, the venture capital industry in Singapore is still new and small, but there are currently around 100 venture capital firms that provide funding.
Venture capital firms in Singapore include:
- 500 Startups – is based in Silicon Valley and has invested in over 500 startups in Southeast Asia including Singapore.
- Ardent Capital – invests in technology companies in Southeast Asia.
- B-Capital Group – invests in transformative technology startups during the early stages and focus on B2B technology startups.
- Golden Gate Ventures – invest in internet and mobile startups, such as e-commerce, payments, marketplaces, mobile applications and SaaS platforms.
- Jungle Ventures – focuses on investments in technology, software, e-commerce and also has incubation for startups.
- Singtel Innov8 – invests in early-stage startups in Asia-Pacific in the areas of digital media, internet applications and the technology sector.
The last type of funding is private equity (PE). PE refers to an investment made to gain ownership of a private company and usually invest in companies that are in the expansion stage, have competitive advantages in the market and are expected to have positive return on investments.
Some private equity firms are:
- 3V Source One capital – is a private equity firm that invests in areas such as biotech, education, industrial, media, real estate and software.
- AIF Capital – provides funds to companies that specialize in advertising and advertising, healthcare and pharmaceuticals, financial services and power generation.
- L Capital Asia – invests in lifestyle food and beverages, lifestyle retail, beauty and wellness and boutique hospitality.
- Tael Partners – invests in sectors like natural and mining resources, shipping and logistics, real estate development and utilities and infrastructure.
- Venstar – invests in the growth and expansion stage of startups and focuses on petrochemical, energy, resources and pharmaceutical.
The Singapore government provides various grants and funding to support businesses throughout each stage, from early stages to the expansion stage. Feel free to contact us if you have any questions or need assistance with a company in Singapore.
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