S'pore opens fund to inject startup experience

National Research Foundation sets up US$38.1 million in bid to attract managers with entrepreneurial experience into Singapore and mentor local startups.
Written by Liau Yun Qing, Contributor

SINGAPORE--National Research Foundation (NFR) has unveiled plans to set aside S$50 million (US$38.1 million) in efforts to attract experienced entrepreneur managers into the country to boost the local startup scene.

Speaking at Techventure 2010 here Wednesday, NFR Chairman Tony Tan said the foundation will establish the global entrepreneurial executive funding scheme to entice executives to bring their high-tech companies into Singapore and inject business experience here. Run under the Prime Minister's Office, NRF was established in January 2006 to drive the country's research and development strategy.

Entrepreneurial management know-how is necessary or commercialization efforts by startups will be hemmed in, Tan said.

"To create Singapore's own Google, we need the Eric Schmidts who have the broad executive managerial experience to compliment the technologically brilliant founder [the likes of] Larry Page and Sergey Brin. We need a critical mass of such 'rainmakers' to build global high-tech companies in Singapore," he said.

With the fund, NFR hopes to attract entrepreneurial managers to bring their companies into the country, allowing local startups to benefit by leveraging the experience of these seasoned manager as board members or mentors, he added.

Internet, green tech hot on VC list
During a panel discussion, venture capital managers at Techventure point to the Internet and green technology as some hotspots for tech investments in Asia.

David Su, managing partner at Matric Partners China, noted that the venture capital firm is evaluating Internet startups dealing with e-commerce, social networking and digital content creation in China.

In India, Mahendran Balachandran, partner at Accel Partners, noted that while e-commerce is also a significant focus area, the market is challenged by low credit card penetration.

Even with the popularity of e-commerce in the country, Balachandran noted that about 70 percent of transactions online are completed offline.

According to Yishai Klein, managing partner at Israel-based Tamarix Venture and director of Giza Venture Capital Asia, green technology is also popular as an investment option but the industry is "project finance-oriented", where governments and banks typically invest more than venture capitalists.

To overcome this, Klein said his firms target suppliers in the green tech ecosystem.

Panelists also shared some key factors they consider when assessing startups to invest in. Deepak Natarajan, director of Intel Capital, said he looks at whether the startup's technology is a good fit with its target audience and if the country's infrastructure is ready to support the technology.

For example, he said online games will unlikely succeed in Indonesia but will prove otherwise in Vietnam and the Philippines because Internet cafes are popular in the two countries, thus, driving adoption of online games.

Online games are also suitable for emerging markets as the cost of entry is lower for startups, added Natarajan, who leads Intel's investment arm for Southeast Asia, Australia and New Zealand.

Innovation not as important
While innovation may be considered an important component in assessing startups, Klein shared that he currently does not look solely at a entrepreneur's technology. He explained that innovative technology can take three to five years to develop before it can be released in the market.

Instead, he noted that the startup's ability to execute and implement its technology ideas is more important.

Matric Partners China's Su concurred, adding that the entrepreneur's technology does not have to be "cutting edge".

He noted that many technologies in China's online and mobile space are replicated from developed countries. What makes these copycat services successful is the company's ability to adapt the technology to suit its target audience, he said.

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