Singapore Management University (SMU) has launched a US$10 million co‑investment fund to accelerate early‑stage deeptech startups focused on urban sustainability across Asia.
The Urban SustaInnovator (USI) Fund will invest in ventures emerging from SMU’s USI accelerator and the Lee Kuan Yew Global Business Plan Competition (LKYGBPC) pipeline, aiming to speed the route from validation to real‑world deployment in Asian cities.
The fund is anchored to SMU’s Urban SustaInnovator accelerator, a 12‑month, hybrid, zero‑fee and equity‑free programme launched at the 12th edition of LKYGBPC in September 2025. The vehicle is being positioned as one of Southeast Asia’s first university‑anchored co‑investment vehicles dedicated to urban solutions and sustainability.
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SMU says the fund will co‑invest with established venture capital partners on prevailing market terms, providing capital that aligns with the long deployment cycles common in physical and infrastructure‑adjacent technologies.
For catalytic capital and market traction
Professor Sun Sun Lim, SMU’s Vice‑President (Partnerships & Engagement) and chair of the USI Programme Management Committee, framed the fund as a pragmatic response to a persistent financing gap. “Urban sustainability innovation often fails not for lack of ideas, but for lack of capital that understands early‑stage risk and long deployment cycles,” she said. The USI Fund, she added, will “co‑invest with leading venture capital partners and back deep‑tech startups from SMU’s robust global pipeline, providing targeted early‑stage capital to help founders scale proven solutions into Asian urban markets.”
SMU has positioned the fund as catalytic: it will not typically lead rounds but intends to partner with lead investors to provide follow‑on and anchor capital that can de‑risk pilots and first commercial deployments. The university expects the first investments to come from the inaugural accelerator cohort, with deployments slated to start by the fourth quarter of 2026.
The fund’s stated remit covers a broad set of urban sustainability themes — decarbonisation, energy transition, the built environment, mobility and circularity — which reflect both technological opportunity and city policy priorities across Asia. SMU also highlights the fund’s integration with its “Singapore Inc” Advisory Board, a collective of VCs, corporates, scientists and regulators designed to give startups sectoral guidance and market access.
A built‑in deal flow from LKYGBPC
SMU is leveraging the LKYGBPC competition as a deal funnel. The competition drew more than 1,500 applications from over 90 countries, from which seven startups were selected for the USI accelerator’s first cohort. That cohort has already demonstrated commercial movement, according to SMU, suggesting the fund will have privileged access to companies with traction and sector fit.
Several cohort members have recorded visible wins. Malaysia’s Qarbotech, which develops photosynthesis‑enhancing nanomaterials for agriculture, won the Grand Prix at SusHi Tech 2026 and secured a pilot with Tokyu Fudosan Group. UK‑based Mimicrete, a developer of self‑healing concrete, has started a pilot in Singapore with The GEAR by Kajima. Both startups are reportedly in the process of establishing or expanding operations in Singapore, reinforcing the city’s appeal as a regional staging post for deep tech commercialisation.
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The cohort also includes diverse technologies: US‑based MacroCycle is chemical upcycling PET plastics and has drawn institutional capital from Volta Circle; Singapore’s Inviscid AI claims eightfold revenue growth after joining USI by applying physics‑informed neural networks to thermodynamic simulation; Sesame Sustainability, an MIT alumni‑founded industrial decarbonisation software firm, has secured paid pilots with ABB; Smart Tire Company is piloting airless tyres developed from shape‑memory alloys with links to NASA programmes; and French Pronoe is pursuing modular ocean alkalinity carbon removal arrangements with Frontier, the carbon‑removal market platform backed by Meta and Google.
Taken together, the cohort illustrates the diversity and ambition of startups that the fund intends to support, from materials science and hardware to software and carbon removal.
Filling a financing gap for long‑cycle, capital‑intensive ventures
Investors and founders have long argued that deeptech ventures addressing urban systems face a distinct funding problem: they require patient capital and credible pilot pathways with corporates, utilities and municipalities, and often take longer to demonstrate commercial returns than software plays.
University‑linked funds, particularly those integrated with accelerators and research groups, attempt to bridge some of that gap by combining early capital with access to testbeds, expertise and talent.
SMU’s model emphasises a “teaching accelerator” approach: students are embedded in evaluation, due diligence and portfolio support activities so that learning and capital deployment are intertwined. Prof Lim said selected students will participate in startup evaluation, market analysis and diligence, gaining “venture literacy, climate and sustainability insight, commercialisation know‑how and applied decision‑making skills beyond the classroom.”
The pedagogical angle may offer dual benefits: students obtain practical training while the fund taps university resources for additional screening and advisory capacity. Critics, however, caution that university involvement must not substitute for professional investment management; co‑investment partnerships with experienced lead investors will therefore be critical to provide market discipline and exit pathways.
Regional ambitions and Singapore’s role
SMU is marketing Singapore as the launchpad for the USI Fund’s Asia‑wide ambitions. The city‑state’s strengths, regulatory stability, deep corporate networks, and a concentration of engineering and project partners, make it a logical base for pilots and Asia roll‑outs. The fact that several cohort companies are already establishing local footprints supports this narrative.
However, scaling urban solutions across Asia will require navigation of varied regulatory environments, differing infrastructure standards and fragmented procurement processes. Co‑investments that pair local corporate or institutional partners will be necessary to convert pilots into city‑wide deployments.
What to watch next
The USI Fund’s impact will depend on the speed and scale of its first investments, the quality of its co‑investment partners, and its ability to shepherd pilots into sustained commercial contracts. Observers will also watch whether the fund follows through on support beyond capital — for example, by facilitating regulatory approvals, municipal pilots, or industrial partnerships.
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For the city’s startup ecosystem, the fund represents an experiment in combining academic resources, student learning and catalytic capital. If SMU can demonstrate that university‑anchored funding materially improves the odds of scaling urban deep tech in Asia, the model may be copied elsewhere. If not, it risks becoming another software‑oriented VC wannabe without the patient capital and bespoke operational support these ventures need.
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