TECHNOPRENEURSHIP FUND (Disbursement)

Mr Zulkifli Bin Baharudin asked the Minister for Trade and Industry (a) how much of the $1 billion technopreneurship fund has been disbursed; and (b) how has the fund been affected by the current problems affecting many technology start-ups.

The Senior Parliamentary Secretary to the Minister for Trade and Industry (Mr Tang Guan Seng) (for the Minister for Trade and Industry): Mr Speaker, Sir, the US$1 billion Technopreneurship Investment Fund (TIF) was launched in April 1999. By the end of last year, about 85% of the fund have been committed in 45 funds. But only about 28% (S$407 million) of TIF's commitments have been disbursed.

TIF has not been badly affected by the global slump of technology stocks for two reasons. First, we have teamed up with strong VC partners who are amongst the best in the industry. Second, the disbursement of committed funds has been gradual.

The bulk of TIF is invested with established VCs. Several were able to raise more than their targeted fund sizes, though some of the first time early-stage funds (which are meant to help develop local VC expertise) are seeing a slow-down in fund raising and deal flows. Overall, the VC funds in which TIF has invested have raised US$11.7 billion out of the US$12.1 billion targeted fund size.

These VC funds will continue to invest in promising companies here and abroad. They made more than S$1 billion of capital injection into 194 companies worldwide in the last quarter of 2000.

Mr Zulkifli Bin Baharudin: In view of the many problems facing technology start-ups, I would like to ask if the Government is going to review its long-term plans in nurturing entrepreneurship or technopreneurship for such a programme.

Mr Tang Guan Seng: Mr Speaker, Sir, developing the VC industry is a long-term commitment. The current downturn of the technology stocks is in fact an opportunity for Singapore to take advantage of industry consolidation and forge ahead of our competitors. Singapore's response to this downturn will be watched by the investors and VCs. We want to send out signals that Singapore is serious to develop as an entrepreneurial hub.

It is a long-term undertaking. We will push on with our efforts to build an enterprise eco-system, which includes developing Singapore into a major centre for the global VC industry. We have stimulated the local VC industry by establishing TIF in 1999, as I have said just now. But the industry is still at a fledgling stage. To sustain this development, we may need to build upon this momentum generated by TIF1 and also signal to the VCs, investors and companies that we are serious players, despite the current downturn. Hence, we are actively reviewing the need for a second tranche of TIF which is still in discussion.