Last week, in our article Singapore Keen to Energize Technopreneur Scene, we discussed that more details regarding funding for technopreneurs will be announced this week.
At the Techventure 2013 Convention yesterday, DPM Teo Chee Hean announced that an additional S$50 million will be injected to plug a gap in early-stage financing. The fund will be managed by National Research Foundation (NRF), as part of its Early Stage Venture Fund (ESVF) scheme.
Professor Low Teck Seng, CEO of NRF, said that the foundation aims to attract bigger venture capitalists (VCs)to support the ESVF Scheme. Under the scheme, NRF invests on a 1:1 matching basis to seed approved VCs that invest in Singapore based early stage high-tech firms. This means that if a VC invests S$10 million, the quantum would double to S$20 million, after NRF’s contribution.
In a bid to attract more VCs now, NRF said they can tap their global funds to support the local funds. For example, a VC may take out S$10 million out from a bigger global fund of $100 million and allot it under the ESVF scheme.
This represents a liberalization from the former ESVF scheme, which required VCs to set up closed-end funds specifically for investments in the Singapore market. Although this will no longer be a requirement to be a part of the scheme, VCs must still use the investment collected from the NRF initiative to support Singapore incorporated companies.
Singapore startups that have been facing difficulty getting attention from VCs and securing funding at this stage, will welcome this funding.
Source: National Research Foundation
R&D is an integral part of Singapore’s economic strategy, said NRF. According to the foundation, total R&D expenditure has increased about tenfold between 1991 and 2009, from S$760 million to S$6,040 million. In addition, products and processes from R&D generates an average of S$18 billion in annual sales revenue. Sales revenue from commercialisation of R&D technology has also doubled, from S$6 billion in 1996 to S$12 million in 2009.