Singapore VCs commit $204m in COVID-19 support

The capital will be organized as a special situations fund that will invest in selected start-ups on a matching one-to-one basis with private sector co-investors. The scheme will end when the funds are fully committed or by the end of October 2021, whichever is earlier.

The vehicle will target companies identified as contributing to Singapore's national priorities, with Seeds focusing on the earlier stages and EDBI concentrating on companies with larger funding needs and wider employment bases. Criteria for consideration include having intellectual property developed or owned in-house, the ability to demonstrate a commercially viable model, and strong corporate governance.

Seeds is the investment arm of Enterprise Singapore, a business development agency under the Ministry of Trade and Industry, while EDBI is the corporate investment arm of the government's innovation-focused Economic Development Board. Both entities are sector agnostic, with EDBI investing globally while Seeds targets only locally based start-ups with potential for global expansion.

"In this difficult financing climate, even start-ups that were doing well pre-COVID-19 can have cash flow difficulties, with many facing financing challenges given the more cautious funding approach that most VCs and PEs are adopting," Chu Swee Yeok, CEO of EDBI, said in a statement. "We look forward to working with partner funds to support technology start-ups so that they can continue to execute on their growth plans to build strategic capabilities in Singapore, continue with their innovation activities and expansion plans to capture new market opportunities."

Similar activity on this front includes the launch of an open-ended COVID-19 special situations fund by Singapore VC firm TNB Aura. AVCJ understands that the fund will be a sidecar-style vehicle within TNB Aura's second flagship fund, which is expected to see a formal launch in the near term with a target of $100 million. TNB Aura was set up in 2018, when Singapore's TNB Ventures and Australia's Aura Group jointly raised about $27 million for a debut fund.

Southeast Asian start-ups are considered vulnerable to the macro pressures related to COVID-19 due to a relative lack of capital resources. Governments often prioritize support for micro-businesses and low-income workers, while traditional banks remain reluctant to invest in the start-up ecosystem. VC capacity appears to offset these effects, however, with some estimates for dry powder in the region reaching as high as $3.9 billion.

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• Topics
• Southeast Asia
• Fundraising
• Venture
• Credit/Special Situations
• Singapore
• EDBI
• coronavirus
• covid-19