The Venture Capital landscape in Malaysia

Photo by Markus Winkler on Unsplash

What is Venture Capital?

Venture Capital (VC) is a form of private equity whereby investors will fund a company with high growth potential in exchange for a large percentage of the shares in the company. VC firms provide funds to startups or SMEs who would like to expand and accelerate their product, but may not have the resources to do so. As these investors can come from a range of industries and may fund companies from varying stages, they will have analysts that will assess the suitability of their VC firm investing into the businesses. Moreover, since VC firms take high risks when investing, the terms of the investment are usually set by them, therefore they can have a lot of influence in the day to day operations of the companies they invest into.

What is the VC landscape like in Malaysia?

Within the recent years, there has been a rise in VC firms as well as investments made through VC in Malaysia. The growing industry has helped improve the environment for startups and SMEs in Malaysia as more opportunities for funding continues to rise. This is also particularly important for the development of Malaysia as it can also create more jobs and foster an environment that encourages more innovative solutions.

Currently, there is a newfound thirst for innovative ideas and solutions given the situation the pandemic has put us in. VC firms not only provide money to help with the expansion of operations but also provide guidance, connections and other resources that can help improve the quality of the startup industry within Malaysia. This is very important for when the Malaysian economy will need to rebound in the post-pandemic world.

Accelerator List (Idea stage)

If your company does not have revenue yet and is therefore still in the idea stage, it is worth considering enrolling into an accelerator program as VC firms will not invest into idea stage companies. An accelerator, such as our Alpha Startup program, is a fixed term program that helps startups jump-start their business through seed investment, networking opportunities and mentorship in return for equity in the startup. Though an accelerator is different to a VC, it is something worth considering if your startup is still in its idea stage.

Government Accelerators

1. Selangor Accelerator Programme by SITEC
2. Mranti (formerly known as MaGIC)
3. RAVE Accelerator by MyNEF
4. Cyberview Living Lab

Private Accelerators

1. Alpha Startups Pre-Accelerator
2. NEXEA
3. Finnext
4. Scale Up Malaysia

Corporate

1. NEXEA corporate accelerator
2. Sunway iLabs
3. Hong Leong

VC firm and Government grant list (Early stage)

Early stage companies are difficult to define, however they typically should have a working business plan and prototype. They should also have some revenue, but not necessarily any paying customers and though the company is formed, it may not be operating.

These early stage companies will usually seek funding of under US$1 million from either VC firms or through grants. Grants are financial awards given by the government to a startup and it usually originates from the ministry of finance.

VC firms (Early Stage)

1. 1337 Ventures
2. NEXEA VC
3. Bintang Capital Partners
4. TH Capital
5. BizAngel
6. Expara Ventures
7. CradleFund
8. TinkBig Venture
9. 500 Global
10. and more, listed on Muru-ku.com VC List

Grants

1. Cradle
2. MDEC
3. Teraju Superb
4. Penjana Kapital
5. and more, listed on Muru-ku.com Grant List

VC firm list (later stage)

Later stage companies are companies that seek above US$1 million in funding and need to prove that they are in operation. They usually ask for funding with the intention of expanding their business.

1. TH Capital
2. Intres (via Axiata Digital Fund)
3. Cradle Seed Ventures Management Pte Ltd
4. Mavcap
5. Jungle Ventures
6. KK fund
7. Sequoia Capital
8. Golden Gate Ventures
9. Vertex Ventures
10. Softbank Capital
11. Spiral Ventures (previously IMJ Investment Partners)
12. SPH Media Fund
13. Asia Venture Group
14. Incubate Fund
15. Rebright Partners
16. and more, listed on Muru-ku.com VC List

Is the VC route right for you?

In addition to funding, opting for the venture capital (VC) route also comes with numerous non-monetary benefits. As mentioned, since VC firms have their own expertise from investing into previous companies, they are able to offer guidance and networking opportunities. Here at 1337 Ventures, we are a part of the 1337 ecosystem, therefore as a VC firm, we are also able to provide a plethora of resources from all areas of our ecosystem and guide the businesses we fund into the right direction. Therefore, VC is a more favourable option for those who may want a funding option that comes with some mentorship.

It should be noted, however, that as VC firms aren’t passive and are the ones setting the terms, the investors are likely to interfere with your day to day operations. This is not necessarily a bad thing, but it is something to take into account when deciding whether the VC route is the best for you.

Overall, the VC route is definitely something to consider if you would like to expand your business as an early or later stage company and if your company is only at the idea stage, it is worth considering joining an accelerator program such as ours at Alpha Startups. If you would like to view a more extensive list of the different VC firms in Malaysia, check out our VC list at Muru-ku. At Muru-ku you can access the list of different options for VC funding and filter based on funding stage, investment verticals and search for specific tags to find the VC firm that is best suited for you.

If you are looking to raise funds, pitch your idea or business to us at Pitch Tuesday by registering at this form. You can also contact us through email at info@1337.ventures or Whatsapp at +60 11-5628 0817.