Singapore is seeking co-investors from the private sector with the goal to plow up to SG$150 million into its early-stage, deep tech startup community. It hopes to identify 10 to 15 such partners and target startups in three key sectors including health and biomedical sciences.
Led by Enterprise Singapore's investment arm Seeds Capital, the initiative will tap funds from the Startup SG Equity scheme, under which the government may invest in funds or work with qualified third-party investors to make direct co-investments into eligible startups.
Because investment risks typically are higher and returns slower with startups that deal with deep technology such as artificial intelligence and medtech, venture capitalists in Singapore are less willing to stick their bets in early-stage startups.Read now
With the new call-for-partnership, Seeds said in a statement Thursday it aimed to refresh and diversity its current pool of 30 co-investment partners across the three deep tech sectors, including advanced manufacturing and engineering as well as urban solutions and sustainability. These market segments were aligned with the country's Research, Innovation, and Enterprise 2020 (RIE2020) Technology Domains, which aimed to boost Singapore's research capabilities and support economic growth in key focus areas such as digital health, agri-food tech, urban mobility. and logistics and supply chain that had emerged due to COVID-19.
Seeds would work with the new partners to co-invest up to SG$150 million into the early-stage, deep tech startups over the next five to eight years.
Seed's chairman and Enterprise Singapore's deputy CEO Ted Tan said: "Our industries are pressing ahead with digitalisation and innovation efforts, not just to overcome the impacts of COVID-19, but to pave the way for a new economy. Through the co-investments with these private-sector partners, we hope to provide the appropriate guidance and resources that will enable deep tech startups to succeed in developing new and disruptive technologies that can help our enterprises emerge stronger."
Both local and foreign private entities can apply to be a partner, but should have presence in Singapore.
Under Startup SG Equity, Seeds may invest up to SG$8 million in each deep tech startup, matching each joint investment dollar between SG$500,000 and SG$4 million or up to 70% of up to SG$8 million investment.
Apart from identifying and co-investing in the startups, the private-sector partners also should provide hands-on assistance and mentorship as well as connection to potential clients via their networks, with the aim to help the early-stage startups fast-track their commercialisation journey.
Amongst criteria Seeds uses to assess potential co-investors are their access to funding, with funds ready for deployment by second quarter of 2021, and their ability to make direct investments into the startups with established due diligence and investment frameworks.