A $100 million fund to help tech start-ups was announced on Wednesday, with half the funds coming from the Government and the rest from the private sector.
Deputy Prime Minister Teo Chee Hean told a conference on Wednesday that the initiative was needed as there is still not enough cash to help new companies despite increased government support over recent years.
He said the new fund will be what is known as early-stage financing - earmarked to help new companies commercialise their products and services.
The Government will inject $50 million and join with venture capital firms in a one-to- one co-investment scheme to raise the rest. The National Research Foundation (NRF) will manage the fund.
Mr Teo, who also chairs NRF, said working with more private sector players is important because "they are the best validators of a company's market potential, and also have the necessary resources and networks that can help to bring a start-up to the next stage of growth". NRF chief executive Low Teck Seng said start-ups can apply for $2 million to $3 million each. The NRF expects to fund about 70 companies over five years.
"We are talking to the world's leading (venture capitalists) and asking them to partner with us because they have the network, the experience and the access to talent that can help make it all work," Professor Low told The Straits Times on the sidelines of TechVenture.
The NRF will select about five venture capital firms to co-invest in the new fund next year. A firm could put up $20 million, and the NRF would invest a further $20 million.
Mr Chua Kee Lock, chief executive of Vertex Venture Holdings, said that the new fund "makes sense".
"Presumably, if we can get some success and demonstrate its effectiveness, more could come, or by then such support is needed less. How we select the (venture capital firms) is important. The concern is that we could end up picking a firm which has no interest in Singapore or people who have no capability to help entrepreneurs here," he said.
Mr Leslie Loh, who runs Red Dot Ventures, hopes to see more biomedical, renewable energies, clean technologies and engineering start-ups being funded. "The majority of the funds today are invested in IT start-ups. It is good so far, but we need to diversify to place our bets," he said.
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