The Singapore government will set aside $74 million (S$100 million) for investments in small and medium-sized enterprises (SMEs) under its SME Co-Investment Fund III, Finance Minister Heng Swee Keat announced on Monday.
Delivering the city-state’s budget for 2019, the minister said the fund will co-invest in startups to help them scale and internationalise. Temasek Holdings will be a co-investor in the fund, which will be managed by Heliconia Capital Management.
Qualifying companies are required to have their key management functions and headquarters based in Singapore and have revenues of up to $368.4 million (S$500 million).
SME Co-Investment Fund III is the third edition of this fund, which focuses on providing patient growth capital for Singapore-based SMEs.
“Having smart, patient capital that attracts investors with the expertise and the right time horizon is another way to help firms scale-up. Over the past few years, the Government has worked on improving access to private capital for start-ups and SMEs,” Heng said.
The SME Co-Investment Programme (CIP) was first launched in 2010, comprising the SME Catalyst Fund and SME Co-Investment Fund. In 2014, the government launched SME Co-Investment Fund II (CIF 2) and SME Mezzanine Growth Fund (MF).
Since the fund’s 2010 launch, the government has set aside $295 million (S$400 million) for these funds. Singapore claims that the funds have helped catalyse $1 billion (S$1.3 billion) in funding for the country’s SMEs across industries such as services and manufacturing.
Last November, the Monetary Authority of Singapore (MAS) also simplified the regulatory regime for venture capital managers, launching a $5-billion private markets programme aimed at encouraging global PE players to deepen their presence in the country.
Singapore’s venture capital ecosystem has been growing significantly since. Heng noted that Singapore recorded 220 venture capital deals per year worth close to $4.2 billion. This is a significant jump from just 80 deals worth $136 million in 2012. He added that there are over 150 global venture capital funds, incubators and accelerators based in Singapore, supporting startups based locally and across the region.
Other SME/startup announcements:
- SME Working Capital Loan: To be extended by two years to 31 March 2021
- Scale-up SG: Helps startups scale by partnering them with private and public sectors
- Innovation Agents Programme: Two-year pilot project that matches companies to industry experts for mentorship