Singapore is perhaps the most proactive government in the world when it comes to developing the tech industry: it pumps tons of money into grants and initiatives to create its own version of Silicon Valley.
Of course, it helps that the government is unencumbered by electoral politics, which means it can be far-sighted – precisely what you need to build a startup ecosystem. It also helps that the state can take its pick of really smart people thanks to scholarship programs.
But the extent of government help causes another problem. So many initiatives exist out there that newcomers to the scene might get confused. It doesn’t help that many of these programs have acronyms for names. So to address that, here’s a list of government programs for startups and small businesses, as well as a description of what they entail. A lot of these schemes favor companies with some or majority Singaporean ownership, but foreigners are not excluded.
The Action Community for Entrepreneurship (ACE) is a formerly government-led organization that promotes entrepreneurship in Singapore. While the keys to ACE were turned over to the private sector, the program will still be government-funded for the foreseeable future. One of its main programs is a startup grant which gives up to S$50,000 (US$35,400) to entrepreneurs, matched by their own funds.
There’re quite a lot of requirements attached to this though. While it’s not restricted to only tech startups, you’d need to be a first-time entrepreneur to apply, which means you must not have registered a business entity in Singapore before.
This initiative by the Infocomm Development Authority (IDA) aims to help startups secure contracts with bigger companies that would typically shun them due to the perceived unreliability of their products. After all, failure rates for startups are high. Companies that have been certified by this scheme include Kai Square, V-Key, and Tagit. There’s been a bit of a debate about whether startups should apply for this scheme due to the tedious process, but it’s clear that this is applicable for more mature tech companies.
A*STAR is a government research agency that oversees 18 R&D entities. While not a startup scheme per se, its scholars can provide a crucial source of talent for startups. After completing a two year stint at the A*STAR Research Institute, scholars can pick from a number of tracks, one of which is to work for a private sector company.
ESVF is a program run by the National Research Foundation (NRF). It partners with venture capital firms to invest in startups by matching them on a one-to-one basis. The scheme targets startups in the series A stage and above. About S$100 million (US$70 million) has been pumped into startups so far, and the government announced it plans to invest another S$28 million into this.
I.JAM is an initiative started by the Media Development Authority. It is a grant scheme that doles out government money to startups through government-appointed private sector incubators. The funds are given out typically in two tranches. First is a small round of up to S$50,000 (US$38,000). If all criteria are met, startups can potentially receive another S$200,000, half of which must be matched by a third-party.
The i.JAM scheme, however, has been subjected to rigorous and heated debate about its effectiveness in boosting the startup ecosystem. But some of the incubators in the program, like NUS Enterprise, Tri5 Ventures, and Crystal Horse Investments, are the real deal.
The LaunchPad, informally known as Block 71, is a startup cluster in Singapore that could soon house up to 750 startups. The place is also home to investors, incubators, accelerators, and other startup support services. It is co-managed by industrial development agency JTC as well as ACE, which will be launching a physical concierge service at the LaunchPad to assist startups in setting up in Singapore.
The concept has spread its wings abroad. Block 71 San Francisco was established in 2015 as a coworking space for Singaporean startups exploring the US market.
While this course is not restricted to small companies, startups especially can benefit from knowledge about data science and analytics. This online-offline program by the Infocomm Development Authority of Singapore (IDA) is done in collaboration with Coursera.
While not exactly an initiative for startups, PIC offers huge benefits. It is a tax deduction and cash payout scheme for small and medium enterprises which are investing in productivity or technology. Many restaurants have used this to spend on e-menus and ordering systems. Startups are also using the money to pay for their staff’s laptops and other IT equipment. But arguably the biggest use of the scheme is to pay for R&D costs, which may be carried out in Singapore or overseas.
The SSA is an initiative by SPRING Singapore, a government agency that assists Singapore enterprises. It is a funding scheme targeting niche areas like medtech and cleantech. This year, the government announced that up to S$60 million (US$46 million) will be put into medtech startups through the program. Half of that amount will come from the state.
Smart Nation is an all-hands-on-deck drive by the government to use technology to benefit Singapore residents. The wide-ranging initiative aims to tackle areas like transportation, health care, communications, and energy. While the private sector has been roped in on some of these endeavours, it appears there isn’t exactly a framework as to how startups can get involved. But at least there’s a hotline.
SPRING SEEDS is another dollar-to-dollar co-funding scheme. It will match third-party investors up to S$1 million (US$710,000). The first round of contribution by SPRING SEEDS is usually capped at S$300,000 (US$213,000).
TECS is an initiative that funds R&D projects for early-stage startups, with the aim of developing technology that can be commercialized. The program is further split into two grants, depending on the maturity level of the technology. In total, a startup could get up to S$750,000 (US$579,000).
TIS is another initiative by the NRF, this time targeting early stage startups. Together with partner venture capital firms, it matches up to 85 percent of the VC’s investment, with a cap of S$500,000 (US$385,000) per company. The investor can have the option to buy back NRF’s stake in the company in three years. The program prefers startups with a high-tech focus.
This isn’t well known among tech circles, but it’s there. This fund by the Singapore Tourism Board (STB) supports up to 70 percent of “qualifying costs” for Singapore-registered companies developing tech products for the tourism industry.
Again, not something startup specific, but still helpful. Government agency WDA is sponsoring up to 90 percent of course fees for company employees who want to upgrade themselves at approved centers of learning. Some of these places include the Institute of Systems Science and Hyper Island.
While some of these programs involve the state giving out money directly to startups, a lot of them are done through private investors. Check out this list of venture capital firms situated in Singapore, some of which fall under the schemes mentioned here.
The slew of initiatives listed here are part of the government’s overarching strategy to position the country for survival well into the twenty-first century. Read my article on why Singapore’s startup scene is overrated to get a better sense of the state’s thinking.
Also, because these are government initiatives and therefore involve taxpayers’ money, expect some friction and bureaucracy when applying for them. If possible, seek advice from entrepreneurs who’ve gone through these programs.
This is an updated version of an article that was first published on November 2014.
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