SINGAPORE — Singapore's state-backed co-investment model is attempting to bridge the critical funding gap between early-stage research and commercial deployment, similar to its peers in Europe.
As Estonia debates the structure of its own co-investment vehicle — a discussion raised by Jana Budkovskaja in Fomo.Observer — Singapore offers a tested framework.
Operating under SG Growth Capital, the joint investment platform of Enterprise Singapore and the Singapore Economic Development Board, SEEDS Capital acts as the city-state's primary vehicle for early-stage technology ventures.
The system relies on a strategic matching framework, deploying state equity alongside commitments from independent venture capital partners to de-risk ambitious, high-capital projects.
The fund targets Singapore-based startups at the Seed to Series A stages, specifically those incorporated within the last ten years. It focuses on capital-intensive sectors including urban solutions, health and biomedical sciences, advanced manufacturing, and agri-food. To date, SEEDS Capital has deployed more than S$220 million across over 160 live portfolio companies, with more than S$150 million remaining for future deployment.
Jacqueline Chia, Deputy General Manager at SEEDS Capital, detailed the mechanics of this state-private partnership in an interview on the sidelines of the SWITCH conference. SEEDS Capital was initially launched over 20 years ago with co-matching grants to support a nascent ecosystem.
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"Only after a while, then we felt that the ecosystem was more ready, then we changed to a co-investment scheme where we take equity," Chia said.
The vehicle's mandate is designed to draw private money into sectors that traditionally face a "valley of death" between pilot testing and commercial scale. Rather than acting as an active lead investor, the state deliberately delegates deal selection to the open market to co-share risks, working alongside more than 60 co-investors.
"The reason why we do co-investment is that as a government, we felt that we didn't really have the right expertise to do the due diligence, to spot the best deals," Chia explained. "We would prefer to lean on the private sector, so there has to be obviously a private VC that has the conviction that comes in to lead."
This private-sector-led model has helped catalyse smart money into complex technological breakthroughs. Notable portfolio successes include Hummingbird Bioscience, a developer of precision biotherapeutics for immuno-oncology, which has secured approximately US$150 million in funding from backers including Novo Holdings, Temasek, and Frazier Healthcare. Another portfolio company, Atomionics, has raised over US$5 million for its quantum gravimeter optimised for resource exploration, backed by investors such as Wavemaker and 500 Durians.
To preserve market dynamics, SEEDS Capital caps its involvement to ensure the state does not crowd out institutional money. "We don't want us to take a bigger share compared to the private institutional investor," Chia added, noting that matching ratios dynamically adjust as a company secures more advanced funding.
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