Startup SG Equity’s S$1 Billion Deep-Tech Expansion: What It Means for Founders Structuring Their Cap Table

At the Ministry of Trade and Industry’s Committee of Supply (COS) Debate on 2 March 2026, Minister of State Alvin Tan announced that the Government will set aside S$1 billion to expand the Startup SG Equity (SSGE) scheme, continuing support for early-stage deep tech startups while, for the first time, extending direct government co-investment into growth-stage deep tech companies. It is a significant policy shift: SSGE has, since 2017, focused mainly on catalysing early rounds. The new tranche adds a growth-stage track aimed at companies that have already proven product-market fit and now need serious capital to scale internationally.

For founders, this is good news on funding, but it is not free money in the way a grant is. Equity co-investment from a government-backed fund manager changes who sits on your share register, what rights that shareholder holds, and what your company secretary and legal counsel must prepare before, during and after the round closes. This article covers what was actually announced, how SSGE co-investment works mechanically, and what it does to your cap table, statutory registers and shareholders’ agreement.

We write this from a company secretarial perspective: not to advise you on whether to take SSGE money (that is a commercial and legal decision), but to make sure that if you do, your registers, resolutions and agreements are ready for it.

What Was Announced at COS 2026

According to the Enterprise Singapore media release of 2 March 2026 and its accompanying factsheet, Startup SG Equity is a scheme jointly run by Enterprise Singapore (EnterpriseSG) and the Singapore Economic Development Board (EDB). Since inception in 2017, the Government has invested more than S$560 million through SSGE and says this has catalysed more than S$2.6 billion in private sector investment into Singapore-based deep tech startups.

The new S$1 billion is described as being set aside to continue supporting early-stage deep tech startups and to expand support to growth-stage deep tech startups, advancing Singapore’s Research, Innovation and Enterprise 2030 (RIE2030) goal of becoming a leading global deep tech hub. In his COS 2026 speech, MOS Tan cited Nuevocor, a biotech firm developing therapies for genetic heart muscle disease, which closed a US$45 million Series B round in May 2025, as the kind of growth-stage deep tech company the expanded scheme targets.

Three Investment Modalities, Not Just One

The Enterprise Singapore factsheet sets out three modalities under the enhanced SSGE:

• Co-investment (existing): the Government, through appointed fund managers, co-invests alongside independent, qualified third-party investors into eligible early-stage deep tech startups, based on established co-investment ratios.
• Direct investment (new): SG Growth Capital, one of the scheme’s appointed fund managers, will make direct equity investments into selected growth-stage deep tech startups that operate in domains of high economic and strategic relevance to Singapore and show clear product-market fit with international expansion plans.
• Fund-of-funds (expanded): the Government invests in venture capital funds, which in turn invest in eligible startups. This modality is being expanded to include growth-stage VC firms, in addition to the early-stage VCs it already backs (Matter Venture Partners, a Silicon Valley deep tech VC, was cited as one existing fund-of-funds partner).

SSGE is open to Singapore-based startups with an advanced or specialised scientific or engineering field and research-based intellectual property (patents, know-how or trade secrets) that is differentiated and capable of creating new products, processes or technologies. Fund managers for the co-investment track are SG Growth Capital and SGInnovate; SG Growth Capital administers both the new direct investment track and the expanded fund-of-funds track.

How SSGE Co-Investment Works Mechanically

Under the co-investment modality, the Government’s fund manager only comes in alongside a qualified private investor, on agreed co-investment ratios. Historically these have been structured so the Government contributes a larger multiple of a private investor’s cheque at the first institutional round, tapering toward a one-to-one match as the round grows. Precise ratios and caps for the enlarged growth-stage track have not been published in detail, so founders should confirm current terms directly with SG Growth Capital or SGInnovate rather than rely on older figures.

What matters for a company secretary is the mechanics that follow, regardless of the exact ratio: the government fund manager and the private investor typically subscribe for shares in the same class, on the same round terms, at the same time. This is not a grant disbursed to a bank account; it is a share allotment that must be resolved by the board, recorded in the statutory registers and filed with ACRA.

Cap Table and Governance Implications for Founders

New Share Classes and Instruments

SSGE co-investments and direct investments are typically structured as ordinary shares or convertible/redeemable preference shares, mirroring whatever instrument the lead private investor is using in that round. If your company has previously only issued ordinary shares to founders and an employee share option pool, an SSGE-backed round often introduces your first class of preference shares, complete with its own rights on conversion, redemption, dividends and liquidation preference. Our guide to preference shares in Singapore private limited companies sets out what a new class needs in the constitution and share register.

Anti-Dilution Mechanics

Government co-investment does not exempt earlier shareholders from standard anti-dilution mechanics. If your existing shareholders’ agreement has a full ratchet or weighted-average anti-dilution clause and the new round prices below a prior round, those provisions still trigger, and they interact with a new, larger shareholder base that now includes a government-backed fund manager. Founders should read this alongside our explainer on anti-dilution provisions in Singapore shareholders’ agreements before the term sheet is signed, not after.

Board Seats, Observer Rights and Information Rights

Because SSGE is structured as a co-investment alongside a private lead, the government fund manager does not typically take a board seat in the way a lead VC might. More commonly, the fund manager negotiates information rights (regular financial and operational reporting) and, in some structures, a board observer seat rather than a full directorship. This still has governance consequences: observer rights usually require board papers to be circulated to an additional party, and information covenants need to be captured in the shareholders’ agreement and tracked by whoever maintains your board pack distribution list.

Worked Example: Cap Table Before and After an SSGE-Backed Round

Consider a simplified deep tech startup raising a Series A with a private lead VC and SSGE co-investing at an illustrative 1:1 ratio on the government’s portion of the round:

This table is illustrative only; actual percentages depend on the round size, valuation and negotiated co-investment ratio. The point for a company secretary is structural: a new Series A preference class appears on the register of members, a new registrable controller may need to be assessed and recorded (fund managers investing on behalf of the Government are typically treated as corporate shareholders, not registrable individual controllers, but this should be checked case by case), and the constitution may need amendment to authorise the new share class if it was not already provided for.

What the Company Secretary Needs to Prepare

When SSGE money comes in, treat it as any other priced equity round for statutory purposes, with a few extra items to track given the government counterparty:

• Board resolutions: approving the allotment, new share class (if applicable), and any constitutional amendments needed to create it.
• Register of members: updated to reflect the new shareholder(s) and share class, per the Companies Act 1967.
• ACRA filings: notice of share allotment lodged via BizFile within the statutory timeframe, and the register of registrable controllers reassessed if the structure changes who counts as a controller.
• Share certificates: issued to the new shareholders, or entries confirmed for electronic registers.
• Shareholders’ agreement: updated, or a new deed of adherence prepared, so the fund manager is bound by (and benefits from) the same reserved matters, information rights, anti-dilution and exit provisions as other preference shareholders.
• Register of charges: generally unaffected for a straight equity round, but worth confirming if any convertible instrument carries security.

Because SSGE investments often carry government-specific reporting covenants (for example, updates on headcount, R&D spend, or Singapore-anchoring commitments), build these into your normal board reporting calendar rather than treating them as a one-off task. Founders negotiating these terms for the first time should also get proper legal advice on your shareholders’ agreement, particularly around information rights and any most-favoured-nation clauses a government co-investor may request.

SSGE Equity vs Grant Funding: A Different Governance Conversation

It is worth being explicit about how this differs from the grant-based tracks under the wider Startup SG suite, such as Startup SG Founder or Startup SG Tech, which many SSS clients have already used. Grants are non-dilutive: the company receives funding against defined milestones, with no share issuance, no new entry on the register of members, and no board or information rights created for the grantor beyond standard reporting on how the grant was spent. Our overview of the Startup SG Founder, Tech and Equity tracks sets out the documentation each requires.

SSGE, by contrast, is equity. The Government becomes a shareholder on your cap table, with an economic interest, a class of shares, and, depending on deal terms, information or observer rights that persist for as long as it holds those shares. That means ongoing governance obligations: register maintenance, resolution trails for corporate actions affecting that class, and eventually an exit mechanic when the Government’s stake is bought out, converted, or sold down. Founders planning an eventual buyback should review our guide to treasury shares in Singapore, since a government shareholder’s exit is sometimes structured as a repurchase rather than a secondary sale.

Companies newly incorporated and still within their first three years of assessment should also check how a priced equity round interacts with the Singapore Start-Up Tax Exemption (SUTE), since bringing in a corporate shareholder like a government fund manager can affect the shareholding tests that determine SUTE eligibility in later years.

Practical Steps for Founders

1. Engage your company secretary before the term sheet is signed, so the constitution, share classes and registers are checked against the proposed instrument.
2. Model the dilution properly, including any ESOP top-up lead investors typically require, before agreeing to a valuation.
3. Confirm current co-investment ratios and eligibility directly with SG Growth Capital or SGInnovate, since published ratios can change as the growth-stage track rolls out.
4. Get independent legal advice on the shareholders’ agreement, particularly anti-dilution, information rights and reserved matters clauses a government co-investor may require.
5. Update statutory registers and file with ACRA promptly once the round closes, rather than leaving paperwork to catch up later.
6. Fold government reporting covenants into your normal board cadence, so updates are not a fire drill each quarter.
7. Take a longer view on your business investment planning as a founder, since a government-backed round changes the calculus for future raises and eventual exit, and is worth revisiting as part of your own business investment planning.

Conclusion

The S$1 billion expansion of Startup SG Equity is a meaningful vote of confidence in Singapore’s deep tech founders, and the new growth-stage track fills a real gap for companies that have outgrown early-stage grants but are not yet ready for a public listing. But taking government co-investment is still taking on a shareholder, with everything that implies for your cap table, statutory registers and shareholders’ agreement. Getting the company secretarial and legal groundwork right before the round closes will save considerable time and cost later, particularly once the company raises further rounds, restructures its share classes, or plans an exit.

To speak with the team at Raffles Corporate Services, you can email [email protected] or call, SMS, or WhatsApp +65 8501 7133. We are happy to assist with any queries.

The Editorial Team, Raffles Corporate Services