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Singapore to pave the way for tech startup IPOs

The agreement between the Singapore government and the local bourse will lower barriers to capital markets and make the city-state a more attractive destination for startup fundraising

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Singapore is paving the way for promising technology companies in the country to go public through an agreement inked between the Infocomm Media Development Authority (IMDA) and Singapore Exchange (SGX), the largest bourse in Southeast Asia.

Announced by Singapore’s minister for communications and information, Yaacob Ibrahim, at a regional trade show on 16 May 2017, the agreement would enable these companies, which would have to be accredited by the IMDA, to tap private and capital markets in Singapore more efficiently for expansion.

It would also lower access barriers to capital markets for accredited companies, spearhead more high technology initial public offerings (IPOs) and bolster Singapore’s standing as a venue for raising capital.

Under the IMDA’s accreditation programme, Singapore-based technology companies are accredited based on their ability to deliver products and services, and their financial sustainability. Accredited firms also receive support from IMDA in managing their financials, operations and ongoing risks in their business.

So far, the programme has helped accredited companies generate more than S$70m (US$50.6m) worth of contracts from the Singapore government alone, of which more than 90 projects have been won. Collectively, the companies have raised S$28.9m worth of new growth capital from reputable venture capitalist firms or strategic investors during or after being accredited.

With the IMDA-SGX agreement, the IMDA will work with SGX, law firms, IPO sponsors such as IHT Capital, and audit firms such as KPMG to support accredited companies in their IPO journey. This includes facilitating pre-IPO funding, advising them on listing processes and preparing them for IPO listings.

“We strongly believe that with IMDA’s accreditation of local tech startups, these companies will be able to roll out their business plans with more credibility and have faster access to their respective markets,” said Khong Choun Mun, CEO of RHT Capital. “We will be pleased to assist them with their fund-raising efforts at various stages of their development and to eventually list them on the SGX.”

To boost the visibility of accredited companies in the market, SGX and IMDA will also foster closer ties and information sharing between the financial and technology communities. Such efforts are aimed at deepening the financial community’s understanding of the technology landscape, as well as the business models of accredited companies and the industries they serve.

Michael Leong, CEO of Sesto Robotics, an IMDA-accredited company, said the agreement between IMDA and SGX will offer “a new avenue to explore as we look into various options that can support our global growth strategy to serve the clients better”.

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