As it becomes more obvious that the digital market is the way to go for Singapore’s future economic growth, the city-state is eager to get the public and private sectors talking and working more with each other.
Startup SG was announced in March as a way to unify all its different startup schemes under one brand. Some of the reforms under the scheme include more government participation in startup co-investment and changes to Singapore’s entrepreneur visa to allow more foreign founders to set up companies here.
Today, Startup SG announced that 17 local companies, called Accredited Mentor Partners (AMPs), will recommend new startups for the Startup SG Founder grant. This is a revamped version of the ACE Startups grant, aimed at first-time entrepreneurs who are Singaporean citizens or permanent residents.
Startups that are recommended by these AMPs can get a grant of US$21,300 from the government over a 12-month period. Around US$14 million will be set aside for the Startup SG Founder grant over the next five years.
AMPs are agencies, incubators, and venture capital firms that represent verticals ranging from fintech to advanced manufacturing. They are meant to provide mentorship to selected startups and help connect them to the Startup SG support structure. They will be appointed on a three-year basis.
Nurturing young startups
Among the AMPs are companies like internet of things incubator Airmaker, fintech accelerator Finlab, venture capital firms Quest Ventures, Tri5 Ventures, and TNB Ventures, and more. The full list of partners is available here.
Around US$14 million will be set aside for the Startup SG Founder grant over the next five years.
The 17 mentors were selected based on their incubators’ track records, their management teams, and their specialization in their respective verticals. Forty such companies applied to be AMPs, out of which the final 17 were selected, says Edwin Chow, Spring group director of industry development and innovation & startups.
The selection was made by an evaluation panel comprising government agencies Spring Singapore, the National Research Foundation, the Economic Development Board, the Monetary Authority of Singapore, and the Infocomm Media Development Authority.
AMPs are expected to identify eligible startups and help them hone their offering and go-to-market strategy. Spring will then evaluate the recommended startups and release the grants depending on specific milestones – like successfully creating a prototype product or acquiring a certain number of users/customers.
Given that a lot of AMPs are either incubators or VCs, they will have the option of working more closely with the selected startups, pouring in more funding or including them in their programs.
That’s also part of the appeal of the scheme for AMPs, who don’t otherwise get any funding or other incentives to be part of it.
AMPs will have the option of working more closely with the selected startups.
“The one key benefit as an AMP is that we are more visible to eligible companies early,” Finlab managing director Felix Tan tells Tech in Asia. “The other benefit is that this then becomes our deal-flow pipeline as we scout for strong fintech businesses to join our acceleration programs further down the road.”
For Airmaker managing director Kwai Seng Lee, the scheme is an opportunity to expand the scope of its entrepreneurship programs. Airmaker will be involved in scouting for startups particularly in digital health and smart city solutions.
The incubator’s expertise in hardware can help first-time entrepreneurs figure out how to build prototype products faster and more efficiently. For example, part of its program takes participating startups to Shenzhen in China. It also shows startups how to go after cross-border markets from the get go.
Making them more efficient can help ease the investor reluctance that hardware startups usually get. Additional validation and sources of funding from the scheme should make it easier for startup founders to get over those humps, Lee says.
Long-term planning needed
This doesn’t mean the scheme will automatically be a unicorn-birthing machine. “It is important that we don’t look at this in isolation – that is, so long as we produce good startups, our job is done. Far from it,” Tan says.
As companies that start out through this scheme grow, they will need to find their place in the market both in Singapore and beyond. Connections must be built between them and the young companies coming out of the scheme.
All parts of the equation – industry, government, education, consultancies, and the startups themselves – must work together to create a market that can support more businesses going public in Singapore, rather than go elsewhere when they’re big enough.
“The value they create can then be shared with the public and institutions who have put their trust and money behind them – and by so doing, create a virtuous cycle that will not only bring about strong employment prospects and economic growth for Singapore, but also a more equitable way to share the wealth created,” Tan stresses.
Converted from Singapore dollars. US$1 = S$1.41
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