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Growth Financing Programme |
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The Growth Financing Programme is designed to support early stage, Singapore-based growth companies that have the potential to become globally competitive enterprises. Companies that have successfully completed their product development with early customer traction can apply for equity financing for earnest overseas market expansion activities through the Growth Financing Programme. Potentially, every S$2 raised by the growth company from third-party investors will be matched by S$1 from EDB, subject to a maximum of S$1,000,000 under both the SEEDS and Growth Financing Programmes. Minimum investment from third-party investors is S$500,000.
Both EDB and the third-party investors will take equity stakes in the company in proportion to their investments.
Facts about the programme
Qualifying companies
- Those engaged in the development of new or better products, processes and applications in the manufacturing and services sectors.
- Where innovation can be in the form of technology and/or business models.
- Those incorporated in Singapore and carrying out core activities in Singapore. If the company globalises, the headquarters functions and the highest value-added functions, including but not limited to intellectual property and top management, should reside in Singapore.
- Where product development has been completed with early customer and revenue results.
- Foreign ownership of the company is allowed, subject to the provisions of the Companies Act (Cap.50).
Qualifying 3rd party investor and investors
- Either corporate or individual investor(s) who have no prior interest in the company at the point of SEEDS application.
- For corporate investor(s), it (they) must be legal entities with a minimum paid-up capital of S$500,000. The management of the corporation must also meet the criteria for individual investors, as described below.
- For individual investor(s), he (they) must meet all the following criteria:
- Possess management experience, business contacts or technical expertise that can add value to the startup;
- Not be related to the founder(s) of the startup;
- Not be undischarged bankrupts;
- Declare whether he (they) has (have) been convicted in a court of law, or if there are any pending criminal or civil proceedings against him (them); and
- Maintain arms length transactions with the founder(s)
- On receiving in-principle approval, all 3rd party investor(s) and founder(s) will be required to sign statutory declarations before a commissioner of oaths or a notary public affirming the above. The statutory declaration form will be provided by EDB.
- At least one 3rd Party investor or his nominee must take a Board seat in the company.
Qualifying business activities
The growth company's business activities should have:
- Substantial innovative or intellectual content
- High growth potential
- Scalability for the international market
Excluded business activities
The following activities are not acceptable:
- Real estate development
- Gambling
- Tobacco-related products
- Other activities that violate the law or are against the public interest.
Administrative procedure
Statutory declaration
On receiving in-principle approval, all 3rd party investor(s) and founder(s) must sign statutory declarations before a commissioner for oaths or a notary public affirming that they meet the required criteria. The statutory declaration form will be provided by EDB.
Due diligence
EDB reserves the right to conduct due diligence on the company, and based upon its due diligence, may reject an application. Furthermore, the 3rd-party investor(s) is/are required to provide their complete due diligence report of the growth company to EDB as part of the application. Approval of the application is at the sole discretion of EDB and EDB is not obliged to state the reasons for its decision.
Disbursements
EDB will disburse the funds in the form of paid-up capital upon receipt of documentary proof that the 3rd party investor(s) has or have made their investment. Total disbursement will be made in accordance with the investment schedule.
Divestment
EDB will exit from the investment at the earliest occurrence of one of the following:
- Initial Public Offering of the growth company
- Sales, merger or acquisition of the growth company
- Such time when a third-party cash offer is received by EDB for the purchase of its shares prior to the 5th anniversary of EDB's investment in the company
- If the above exit points have not occurred at the end of the five years, EDB will review the exit strategies. If it decides to divest its shares, EDB will offer a right to both the founder(s) and 3rd party investor(s) to purchase EDB's share based on the proportion of their respective shareholding of the company prior to the divestment.
EDB reserves the right to choose its exit strategy.
Call us at (65) 6832 6832 or email us at growth@edb.gov.sg to find out more.
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