Malaysian government-owned Cradle Fund has launched a new grant product on Wednesday, in addition to removing two previous products as part of its shift from grants towards equity investing.
The new product, known as Cradle Investment Programme 300 (CIP 300), is a pre-seed program that will provide up to US$69,400 in financial and value-added assistance to entrepreneurs who intend to kickstart their businesses without giving away equity.
The program aims to assist early stage entrepreneurs in developing and commercializing their products, addressing the funding gap that early stage businesses often encounter at the stage of ideation and prototyping, as well as during the early commercialisation of their products.
The lower amount of funding that CIP 300 offers will also encourage startups to seek other funding options such as crowdfunding, angel or VC investments.
“By weaning startups off grants, Cradle intends to introduce outside investors earlier ensuring local startups have the discipline, professionalism, and focus required to propel them to the next level,” Cradle explained.
Another revamp in Cradle’s strategy to remove Malaysian startups’ dependence on grants also includes the delisting of two conditional grant products – CIP Catalyst which provides up to US$35,000 and CIP 500 which provides up to US$116,000.
However, this does not mean that Cradle is going to leave the startups after their pre-seed stage, as the startup has also launched DEQ 800 earlier in March, an equity product worth up to US$185,000 that is meant for early stage startups to scale up.
“Today’s local startups could become tomorrow’s global success stories. We want to help startups to grow in Malaysia and go global by helping them navigate from the very start – right from idea stage – all the way to Series A,” said the CEO of Cradle Fund, Nazrin Hassan.
“We now offer two products, DEQ 800 and CIP 300 which bring together a range of funding and value-added benefits to create a more coherent framework to allow startups to grow and do business locally and regionally,” he added.
CIP 300’s key feature is a range of value-added support for recipients such as an intensive mentoring program throughout the funding period, opportunity to be matched with potential investors, training in innovation and commercialization, participation in Cradle business and networking events, as well as media and public relations.
The investment product targets ICT, non-ICT, and other technology-based fields such as semiconductors, life sciences, and clean technology.
For those interested, the program is eligible to Malaysian individuals or incorporated companies that have operated for less than 3 years. Cradle also expects that each grant award will see the allocation of at least 60 percent for commercialization costs, and the remaining for product development, and other costs.
In another development, the agency also said that it has inked a MoU with the Malaysian Business Angel Network (MBAN) and K-One Technology Bhd (KiasuLab), as well as a separate agreement with the Sunway Innovation Lab to create mutually beneficial opportunities between the government and private sectors.
By Vivian Foo, VCNewsNetwork