Startup grants in Singapore
Singapore’s recently announced budget unveiled the launch of SG-Innovate, which is a project to encourage startups, and to promote Singapore as an up-and-coming financial technology (fintech) hub. A new fintech office will be set up by SG-Innovate and the Monetary Authority of Singapore, to act as a one-stop provider for startups in the fintech sector.
The startup scene in Singapore is booming, and being involved in a startup is increasingly viewed as a viable alternative to the traditional career path in Singapore. However, not everyone has the capital required to start a business. This is where grants and funding come in. The Singapore government has made available a variety of grants and initiatives intended to help budding entrepreneurs hit the ground running.
First-time entrepreneurs seeking funds can apply for SPRING Singapore’s ACE Startups Grant. Only first-time entrepreneurs are eligible for this grant. Applicants are shortlisted on a competitive basis, and evaluated for differentiation, business model feasibility, potential market opportunity, and management team quality. The SPRING grant matches every S$3 raised by the entrepreneur with S$7, for up to a maximum payout of S$50,000, without taking any equity stake in the startup. The startup will also be matched with a mentor.
In line with Singapore’s focus on innovation and technology, SPRING Singapore’s Technology Enterprise Commercialisation Scheme (TECS) is aimed at technology startups which display a breakthrough level of innovation. Successful startups will receive funding up to 100% of qualifying costs for each proof-of-concept project, subject to a maximum of S$250,000, and up to 85% of qualifying costs for each proof-of-value project, subject to a maximum of S$500,000. This is one of the largest grants extended by the government, and goes a long way to help early stage startups defray their initial expenses.
Separately from SPRING Singapore, the Infocomm Development Authority (IDA) provides funding support of up to 50% of salaries for 1 year, subject to a maximum of S$200,000 under its iSTART:ACE Scheme. Once again, this scheme is targeted at technology startups, particularly those involved in developing ICT solutions. Also under IDA is the iSPRINT Funding For Packaged Solutions, which covers a host of packaged solutions, ranging from training and consultancy, to specialised packages for sectors. This will benefit later stage startups that need help with operating expenses.
The Media Development Authority (MDA) has a number of grants and schemes available for media startup companies. An MDA Development Assistance grant is available for companies planning to develop an idea into a script, game design, manuscript or storyboard. Other grants offered by the MDA include Produce Assistance, Marketing Assistance, Talent Assistance and more.
Design Singapore co-funds design businesses under their Design Collaboration Assistance (DCA) and Market Access Assistance (MAA) schemes. The DCA scheme seeks to generate more locally developed intellectual property (IP) through funding of prototypes, trial production, user-feedback platforms, product testing and IP registrations. The MAA scheme supports startup participation in prestigious international trade and profile platforms by funding related expenses.
Those who are looking to start social ventures can apply to the ComCare Enterprise Fund (CEF) run by the Ministry of Social and Family Development (MSF). Approved social enterprises can receive up to 80% of the total project cost, subject to a maximum of S$300,000. This is part of a government initiative to create a more caring society.
Startups may seek alternative routes of funding via various co-funding schemes. However, this method does involve angel investors or venture capital firms, and typically such financing means a portion of the equity must be relinquished, depending on the amount of funding received.
SPRING Singapore offers co-financing schemes such as the Business Angel Scheme where it co-invests with angel investors for equity, matching dollar-for-dollar for up to a maximum of S$2 million. On top of that, approved angel investors are able to enjoy a tax deduction of 50% at the end of a two-year holding period which further incentivizes angels to invest in Singapore startups. The SPRING Startup Enterprise Development Scheme (SPRING SEEDS) is another equity-based co-financing option for Singapore-based start-ups.
The National Research Foundation has a co-funding scheme known as the Early Stage Venture Fund targeted at early-stage technology startups and venture capital firms.
In addition to all the grants and funding schemes, startup tax exemptions, Productivity and Innovation Credits (PIC) for tax deductions etc, and other industry-specific schemes and incentives are also available.