1. 14 October 2011
NRF TO ALLOW MORE INVESTORS TO BENEFIT FROM
SUCCESSFUL TECH INCUBATOR SCHEME
• The 7 technology incubators selected under NRF’s Technology Incubation
Scheme (TIS) have invested in 31 start-up companies since Aug 2009,
creating much vibrancy in Singapore’s entrepreneurial environment
• NRF will now open up the application process to allow more qualified
investors to set up technological incubators under the TIS
Have a great idea that you think can be turned into a killer application? The National
Research Foundation (NRF) can help you to take the first step. Since Aug 2009, its
Technology Incubation Scheme (TIS) has seen 7 Technology Incubators invest in 31
start-ups and provide them with systematic management guidance and mentorship.
The success of the scheme has prompted the NRF to bolster the pool of incubators
by inviting more experienced investors and entrepreneurs to join the TIS.
Under the umbrella of the National Framework for Innovation and Enterprise (see
Annex A), the main aim of the TIS is to help start-ups improve their chances of
turning innovative ideas into commercial businesses (see Annex B). The current TIS
Incubator Managers were chosen by NRF to provide mentorship and guidance to
high tech start-ups during the most vulnerable seed stage of their development. The
Incubators are also required to invest in their incubatees as well as help them secure
further funding after incubation.
The selected TIS incubators comprise both local and foreign managers. These
include the successful Plug and Play Incubator from Silicon Valley and incubators
set up by Brad Greenspan, internet entrepreneur and founder of social networking
company MySpace and angel investor Joiichi Ito, who was recently appointed
director of the famed MIT Media Lab in the United States.
Announcing the open application process for TIS at Techventure 2011, Dr Francis
Yeoh, CEO of NRF, said: “We are pleased that the TIS scheme has created quite a
buzz in the entrepreneurial eco-system in Singapore. The incubator managers have
been actively making their investments in a good number of high quality start-ups,
with many more in the pipeline. The TIS scheme provides very good leverage for
incubator managers, allowing them to invest in more companies because of NRF’s
co-funding. However, there is a very important principle in the TIS implementation –
all funding goes to the start-up and all efforts are directed to make the start-up
succeed. In this way, the objectives of all parties are aligned to ensure the start-up’s
success, because no one benefits otherwise.”
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2. Mr Bill Liu, Chairman & Managing Partner at TIS Incubator Stream Global Pte Ltd,
said, "Being part of the TIS scheme enables us to leverage on the risk sharing
platform provided by NRF. The seven partners of Stream Global who are all
experienced ex-CEOs of listed and non-listed companies can give the incubatees
good advice especially in the ICT and digital media sector. We are looking to help
entrepreneurs with innovative ideas and passion to realize their dreams through
working with us."
Mr Chua Zi Yong, CEO of Stream Media, a start-up invested by Singtel’s Innov8 and
Stream Global, commented: "Branding and credentials are very important in the B2B
business, especially when the clients and partners are foreign companies and
MNCs. The TIS scheme lends us credibility and enables us to leverage on the
Singapore brand overseas, in addition to financial resources to scale our operations
and sales activities. We have since sealed agreements with companies like Lenovo
China and MOL and will be entering the Chinese market later this year."
Mr Reza Behnam, CEO of Adzcentral, an advertising platform company incubated
under TIS incubator Neoteny Labs, added, “China and India have been receiving a
lot of attention from technology investors and venture capitalists (VCs) because of
their market size. Singapore, however, is an ideal location to start up a company and
schemes like the TIS just make it even more attractive. NRF’s co-investment not only
helped us start up but also helped attract further investments into the company.”
Experienced investors and entrepreneurs who are interested in joining the TIS
scheme are encouraged to approach the NRF. The same terms enjoyed by the
current incubators will apply as will the obligations and expectations. NRF will
evaluate the applications and admit those who are able to meet the criteria of the
TIS. Prospective Incubator managers are invited to submit an application (form of
expression of interest attached as Annex C) to the National Research Foundation at
corpcom@nrf.gov.sg
Encl: Annex A – NFIE Factsheet
Annex B – TIS Factsheet
Annex C – TIS Expression of Interest
__________________________________________________________________
The National Research Foundation (NRF)
The National Research Foundation (NRF), set up on 1 January 2006, is a
department within the Prime Minister's Office.
The NRF sets the national direction for research and development (R&D) by
developing policies, plans and strategies for research, innovation and enterprise,
funds strategic initiatives, builds up R&D capabilities and capacities through
nurturing our own and attracting foreign talent, and coordinates the research agenda
of different agencies to transform Singapore into a knowledge-intensive, innovative
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3. and entrepreneurial economy. It provides secretariat support to the Research,
Innovation and Enterprise Council (RIEC), chaired by the Prime Minister.
The NRF aims to:
• Transform Singapore into a vibrant R&D hub that contributes towards a
knowledge-intensive, innovative and entrepreneurial economy; and
• Make Singapore a talent magnet for scientific and innovation excellence.
For more information, please visit www.nrf.gov.sg.
For media queries, please contact:
Ms Cheryl Loh
Head, Corporate Communications
National Research Foundation
DID: 6684 2928; Mobile: 9880 5507
E-mail: Cheryl_Loh@nrf.gov.sg
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4. ANNEX A
FACTSHEET
National Framework for Research, Innovation and Enterprise (NFIE)
The National Framework for Innovation and Enterprise (NFIE) aims to grow
innovation and entrepreneurship and strengthen the entrepreneurial eco-system in
Singapore.
NFIE was approved by the Research, Innovation and Enterprise Council (RIEC),
chaired by Prime Minister Lee Hsien Loong on 28 March 2008. The framework will
encourage institutes of higher learning (IHLs) – universities and polytechnics – to
pursue academic entrepreneurship and turn their R&D results into commercial
products for the market place. It will also help entrepreneurs to start up technology-
based companies.
The NFIE has been reviewed and updated since it started. The current budget of
$360m supports the following initiatives:
Scheme Scheme
Early Stage Venture Fund (ESVF) Proof-of-Concept Grants (POC)
The NRF invests $10 million, on a 1:1 This grant of up to $250,000 is for
matching basis, to seed 6 venture capital technology proof-of-concept
(VC) funds that are required to invest in development projects. NRF administers
Singapore-based early stage high-tech the scheme for IHL-linked researchers
while SPRING Singapore (the
companies. As an incentive, the VCs are
government agency responsible for small
given an option to buy out NRF’s share businesses) manages a parallel scheme
of the fund within 5 years by returning for companies.
NRF’s capital with a nominal interest.
Disruptive Innovation (DI) Incubator Technology Incubation Scheme (TIS)
This scheme supports a business The NRF co-invests up to 85% (capped
incubator which invests in Singapore- at S$500,000) in Singapore-based start-
based start-ups with disruptive up companies that are incubated by the
selected Technology Incubators. In
innovation. The methodology is based on
return, these incubator operators provide
the work of Harvard professor and their investee companies with physical
innovation guru Clayton Christensen. space and systematic guidance. As an
incentive, the incubator operators are
given an option to take over NRF’s stake
in the start-up companies within 3 years
by repaying NRF’s investment with a
nominal interest.
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5. Scheme Scheme
Translational R&D Grants for University Innovation Fund (UIF)
Polytechnics (TRD)
This provides funding to the 3
These development grants of up to universities for approved innovation-
$500,000 are given to researchers in the related activities. Each university must
polytechnics to carry out translational set up a high-level Enterprise Board to
research using intellectual property (IP) oversee and manage the fund.
from the universities and research
institutes.
National Framework of IP Principles Innovation and Enterprise Institute
(IEI)
This is a framework to speed up the The proposed Institute’s objective is to
licensing of IP from the universities and help develop the innovation and
research institutes to industry. enterprise (I&E) eco-system by providing
the necessary information, research
methodology and relevant networks to
galvanise I&E activities in Singapore.
Global Entrepreneur Executives (GEE) Innovation Vouchers Scheme
This is a scheme to get high-growth and
high-tech venture-backed companies This is a scheme where local enterprises
with Global Entrepreneurial Executives 1 are given vouchers that are redeemable
for R&D and technical services from the
(GEEs) in ICT, medtech and cleantech to
IHLs and public research institutes. This
relocate to Singapore. NRF will invest scheme has since been transferred to
up to US$3m in matching funding to SPRING Singapore.
eligible companies through 2 Singapore
VCs, in the form of convertible notes.
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GEEs refer to entrepreneurs with significant operating experience and track records (in a leadership capacity)
in the growth of successful start-up companies. Specifically, they should have played a leadership role in a
company’s growth from start-up to at least US$100 million in revenue or company valuation.
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6. ANNEX B
FACTSHEET
NRF’s Technology Incubation Scheme (TIS)
Under its Technology Incubation Scheme (TIS), NRF has selected 7 Incubator
Managers to nurture early stage high tech start-up companies in Singapore.
These 7 incubators are:
• Clearbridge Accelerator
• I2G Tech Accelerator
• Neoteny Labs
• Plug & Play
• Social Slingshot
• Small World Group
• Stream Global
The TIS, modeled after Israel’s Technological Incubator Programme, provides up to
85% (capped at S$500,000) of funding for each start-up company identified by the
Incubator Manager, with the latter making up the rest of the investment. As an
incentive, the Incubator Manager has the option to buy out NRF’s share in the
invested start-ups within 3 years of investment by repaying the capital plus interest.
In this way, the government shares the risks of investment while providing the
Incubator Manager with the upside of success in return for its efforts in nurturing the
start-ups.
The TIS call for proposal on 25 August 2009 received 32 submissions from local and
foreign incubator managers. Seven incubators were eventually chosen on the basis
of their ability to provide suitable mentorship, the extensiveness of their networks
and their commitment to link start-ups with customers and investors for subsequent
funding. Under the guidance of Incubator Managers, the chances of start-ups turning
their ideas into viable businesses are greatly enhanced.
Including Innosight Ventures2, which was separately approved under the Disruptive
Incubator Scheme, there are now 8 NRF-supported technological incubators.
2
Innosight Ventures is an incubator under NRF’s Disruptive Innovation Incubator Scheme. This incubator,
based on the disruptive innovation methodology of Prof Clayton Christensen, has been set up to identify
companies that have the potential to disrupt a current industry and create new ones.
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7. ANNEX C
Expression of Interest in the Technology Incubation Scheme
Background of Technology Incubation Scheme (TIS)
1. The TIS comes under the umbrella of the National Framework for Innovation &
Enterprise (NFIE), which was formulated in 2008 with a $360 million budget to
advance R&D-based innovation in Singapore with a view to commercialization.
NFIE encourages institutes of higher learning (IHLs) – universities and
polytechnics – to engage in innovation and academic entrepreneurship to turn
their R&D results into commercial products for the market place.
2. Under the TIS, the National Research Foundation (NRF) will co-invest with the
chosen technology incubators in Singapore-based high-tech start-ups.
Incubators have the option to buy out NRF’s equity share within 3 years of
investment.
3. NRF invites suitable parties to submit proposals to operate such technology
incubators. These incubators should have the means to select high-quality
start-ups, the resources to invest in them, the physical space to house them,
and the ability to support them via mentorship, access to customers and the
securing of follow-on funding etc.
Eligibility
4. Interested parties with experience in start-up incubation, venture funding or
high-tech entrepreneurship may apply.
Terms of the Technology Incubation Scheme
CO-INVESTMENT TERMS
Funding Quantum Co-funding of up to 85% of total investment for
each company (or a maximum of S$500,000
per investment). The incubator manager
provides the rest of the investment.
Eligible Investee High-tech start-up companies based in
Companies Singapore.
Equity Stake NRF and the incubator manager’s equity in the
investee company will be at the same valuation
and in accordance with their investments.
NRF’s equity will be in the form of a convertible
bond.
Maximum Share of As a general rule, the investment in the
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8. Investee Company 3 investee company should not dilute the
founders’ share to less than 50%.
Buyout Option NRF will offer an option for its share in the
investee company to be bought out, at a price
of 1.1 times capital in the first 2 years, and 1.15
times capital in the third year.
REQUIREMENTS OF INCUBATORS
Incubator Manager There should be at least one full-time incubator
manager to provide active mentoring to
investee companies.
Link to Institutes of Higher It would be desirable for incubators to have
Learning (IHL) some linkage to institutes of higher learning.
Physical Space The incubator should have a suitable space to
house the investee companies.
Operating Expenses Operating expenses for the incubator will not be
funded by the scheme.
Selection Process
5. NRF’s panel of experts will select the incubators based on the merit of their
proposals.
Proposal Submission
6. Interested parties can submit their proposals to NRF with the following details:
• Description of Incubator: Organisation structure, operations, staffing
• Incubator Managers: Bio-data and track record of incubator managers
• Description of Incubation Process: Process for selection and
nurturing of start-up companies; plans to help incubatees secure
follow-on funding after incubation.
• Funding: Proposed mechanism to fund the set-up and operation of the
incubator.
7. All proposals should be submitted by email to corpcom@nrf.gov.sg. Please
title your email as follows: “Technology Incubation Scheme - <Incubator Name>”.
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This is to ensure that the founders remain committed to the success of their company.
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