Today marks another achievement for Malaysia’s early stage startup investor – Cradle Fund Sdn Bhd. as the funding company reveals its 7th batch of co-investment partners – adding six more venture capitals to the list that will join Cradle’s equity co-investment program.
Among the six new equity co-investment partners include RHL Ventures, TinkBig Venture, Biz Angel Network, EIX Group, Segnel Ventures, and PlaTCom Ventures. This latest inclusion will bring the number of Cradle’s equity co-investment partners from 25 to 31 as well as an investment of up to MYR 14.5 million (about US$3.26 million) to fund local tech startups.
The equity co-investment program where Cradle matches the contribution made by a partner has started in 2014 with existing co-investment partners including Fatfish Ventures Sdn Bhd, OSK Ventures International Bhd, CoENT Ventures Partners Ltd, Crystal Horse Investment Pte Ltd, Captii Ventures Pte Ltd, Kathrein Ventures Sdn Bhd, and KK Fund.
Additionally, the government-run organization has also signed a grant co-investment partnership with a Singapore-based seed fund provider, Golden Gate Ventures (GGV) back in June 2014. It has raised a total of MYR 161.2 million (about US$36.25 million) from the previous six cycles. Now, with its 6 new partners, the co-investment funds have been raised to MYR 190.2 million (about US$42.75 million).
“We wish to have a diversity of investors in our co-investment circle from venture capitalists and institutional investors to ECF platforms whose investors consist of sophisticated angels who are no stranger to funding early stage businesses,” said Cradle Group CEO, Nazrin Hassan.
Having these new partners, thus, would give the funding company an opportunity to tap into their partners’ insights and experience investing in startups which Cradle may not have. This, in turn, would bring advantage to the Malaysian startups that aim to become global players.
To date, more than 700 tech startups have benefited from Cradle, as the agency has the highest commercialisation rate among government grants in the nation. As for the co-investment scheme, there are 4 companies that were funded through the program which includes BeMalas, the only app one literally need for anything; MauKerja, a job-hunting platform; Sync Media, a mobile solution that aims to break down the barriers of communication between teachers and parents, and SupplyCart.
For this cycle with the latest six partners, Cradle announced that RHL Ventures and TinkBig will contribute the same investment amount of US$1.12 million, Biz Angel Network and EIX Group investing US$449,505 each, and Segnel Ventures US$112,367 while PlaTCom Ventures contribution were undisclosed, according to Cradle at an event in Kuala Lumpur on Monday.
The investment scene this year in Malaysia has been quite slow as compared to last year. It is apparent that the regional investment has subsided due to the geopolitical risk which has in turn affected not only the currency value but investments in Malaysian startups. Through this move, Cradle has moved and encourage venture capital investments in Malaysian startups to help spur the ecosystem.
On the other hand, Cradle Fund Sdn Bhd has also announced that its 2017 allocation from this year’s MYR 30 million will be reduced to MYR 22 million. This reduction has been announced in light of the healthy development of ecosystems for technology startups, which are increasingly able to tap into equity crowdfunding, as well as peer-to-peer financial and advisory facilities and services.
“The introduction of alternative platforms for startups to raise fund through Equity Crowdfunding (ECF) platforms and Peer-to-Peer (P2P) financing came at the right time. This has helped to reduce the impact of the slowdown,” he added.
As a whole, this collaboration will likely bring various benefits to the Malaysian startup ecosystems. Subsequently, there is still a reason to invest in Malaysia as not only does the nation has a pro-business government but simply put, the Malaysian entrepreneurs’ hunger for success is no less than their Singaporean peers. Moreover, there are fewer investors eyeing the country which opens up more opportunities for venture capitals.
For more information, please visit http://www.cradle.com.my/
By Vivian Foo, Unicorn Media