Synchronisation can be incredibly moving – the moments when the individual voices of a choir soar in harmony, when the dancers in a ballet come together to each repeat the same moves, that second in a karaoke room when you look out and see everyone caught by the same song. It is these moments of synchronisation, both practiced and spontaneous, that have been moving these past few weeks as the world watched the Queen Elizabeth II’s funeral. I watched eight young soldiers from the Grenadier Guards carrying the Queen into the Palace of Westminster with the coffin, draped in the Royal Standard, weighing on their shoulders, their hair damp with sweat from their now removed bearskin hats, their faces pressed against the coffin to make sure that, even now, she moved with grace. Yes, rehearsed but also with some luck in the perfect timing. Also moving was the synchronisation of thousands of people leaving their homes – David Beckham included – and heading to London to join the miles-long queue to walk past her coffin as it lay in state, to say their own farewells. And the uniform silence that fell on them as they entered the great hall.
In a country of just a few million people like Singapore and Israel, it is often easy to move in unison, especially when the chips are down, and situations call to action. But if you come from a nation the size of Malaysia with 33 million citizens and counting, it can be trickier to talk about national agenda, let alone engender one, in a country where diversity of race, culture, and religion shape the people’s outlook on life in divergent ways. Other countries do not have the same preoccupations we do.
In practically every disaster movie – be it Independence Day or The Sum of All Fears – there comes a moment when a character looks at the protagonist and says something to the effect of “the fate of the planet or the country is in your hands”. Though there is no asteroid bearing down on Earth and no nuclear bomb going off, we are facing our fair share of serious obstacles in the third decade of this century. To those who consider themselves entrepreneurs, our country – and the world – depends on you. Our future is going to rise and fall with the dreamers and doers, the builders of new technologies and the breakers of old orthodoxies. Let us worry a little less about our net worth or valuation and a little more about our net impact. Entrepreneurs do have a responsibility to do more than develop popular apps or create another marketplace. The Internet of Everything will affect every aspect of our lives in increasingly seamless ways, and we shall use this tool to our advantage. Innovations will be addressing core societal needs and broad-scale change, and that many will be focused on impact as well as purpose, not just profit.
To corporates, it is time to develop a perpetual sense of paranoia and curiosity. It is time to both fear the future and seize its promise, to restlessly drive to master it, no matter what it holds. Companies would be better positioned if you figured out how to better engage with entrepreneurs so that you can invest in them and own a piece of the action. Some established companies have created internal venture funds, in part to have an early-warning radar system for emerging ideas, some of which may end up leading to profitable partnerships. Others have developed their own innovation department, serving as a concierge of some sorts to help build bridges between executives and entrepreneurs. In this digital age, partnerships will become more important. As Helen Keller said, “alone we can do so little, together we can do so much”.
If entrepreneurs have a responsibility to devote their talents to making a lasting positive impact on society, and if executives are required to break down silos and look beyond their industry for partnerships to invest, then government has an obligation to encourage entrepreneurs and smooth the way for partnerships as well as investment to take off. While politicians and regulators love to tell others how important it is to encourage innovation, talk is often cheap. We must replace those platitudes with actionable policies. We must reduce the regulatory burdens on entrepreneurs while forging a new path forward for new industries, must make the playing field level, so every good idea or invention has a shot at raising capital, and must attract as well as retain talents so we can win the global battle for the best and the brightest.
In other words, a startup ecosystem comprises a group of people, startups, and related organisations that work as a system to foster innovation and use the pool of resources available to create and scale new startups. This ecosystem draws together vital actors and stakeholders that gravitate towards growth ventures, including new entrepreneurs, mentors, incubators, sources of talent such as universities and corporations, investors and supporting services like startup-savvy law and accounting agencies.
Malaysia Startup Ecosystem by the Numbers
As a strategically placed country with a diversified economy and robust offerings, Malaysia as a nation has proven time and time again as a country that is ripe for startups and investments in many areas. Located at the heart of the ASEAN, startups in Malaysia have access to over 674 million potential customers within the region. The country has unrivalled connectivity, infrastructure, talent, and strong government support, which is conducive for entrepreneurs to create and grow new startups. The country has been consistently ranked as one of the world’s most promising emerging startup hubs by Startup Genome, a testament to its potential to develop into a vibrant venture capital ecosystem.
The Malaysian government has long been committed to aiding and growing Malaysia’s startup ecosystem. The government funneled resources to startups by providing grants and incentives through several government agencies such as Cradle Fund, MDeC, Penjana Kapital, Malaysia Venture Capital Management, Modal Perdana, and Malaysia Debt Ventures. To further encourage innovation, the government has adopted policies, including the National Technology and Innovation Sandbox, to nurture and promote innovation in the country.
Additionally, the government has created its own accelerator/incubator program to spur the growth of both local and international startups through several agencies. Startup accelerators support earlystage, growth-driven companies through education, mentorship, network, and financing. Startups enter accelerators for a fixed period and as part of a cohort of companies. Here are some of the available government accelerator programmes in Malaysia:
1) Global Accelerator Programme (GAP) by Malaysian Research Accelerator for Technology & Innovation (MRANTI)
GAP by MRANTI is a government-funded Accelerator Programme tailored for both local and international startups with an ambition to expand in the ASEAN market. It is a 2-month thematic Accelerator that focuses on expediting the growth of companies to scale and commercialise products and services by being investment-ready.
2) Selangor Accelerator Programme (SAP) by Selangor Information Technology & Digital Economy Corporation (SIDEC)
SAP is a structured 4-month scheme, organised by SIDEC under the Selangor Government. It aims to assist startups in the early stage that have not undergone Series A funding. The programme acts as a gateway for startups to prepare themselves for the final demo day and for them to be investor-ready. Participants also get to go for overseas pitching opportunities, study trips and gain the necessary industry-related exposures. Notable alumni includes but not limited to Petotum (Online Booking Platforms for Pets Care), and Golog (Logistic Platform).
3) RAVe Accelerator by The New Entrepreneurs Foundation (MyNEF)
RAVe Accelerator is a 12-week intensive Accelerator that focuses on creating a core catalyst for Bumiputera ICT Companies to drive and contribute to the growth of Malaysia’s ICT industry. RAVe has curated an experienced pool of mentors and coaches to ensure that each venture that is accelerated is investor-ready at the end of the Programme.
The Malaysia Startup Ecosystem Roadmap (SUPER) 2021–2030 is a crucial government initiative launched by The Ministry of Science, Technology and Innovation (MOSTI) on 18th November 2021. By coordinating efforts among all main stakeholders, SUPER, under the purview of Cradle Fund, serves as the true north of all other national laws and rules on startups, intending to provide a friendly, effective, and efficient environment for startups. Under SUPER, the Mystartup platform was initiated to serve as a central depository of information on Malaysia’s ecosystem. It is a digital information resource portal that provides comprehensive facilitation services for startup ecosystem networks. Through this initiative, the country aims to create 5,000 startups and 5 unicorns by 2025. The ultimate goal is to place Malaysia as one of the top 20 global startup ecosystems.
But how does Malaysia currently match up against its close neighbour, Singapore?
Startup Ecosystem – Malaysia vs Singapore
Based on the table above, Malaysia’s Kuala Lumpur lags behind Singapore in all startup ecosystem metrics. Singapore is one of the smallest ASEAN countries in terms of population, and the country is home to fewer than six million people. What Singapore lacks in size, they certainly make up for it in its startup ecosystem. Singapore ranks 18th in the Top 30 Global Startup Ecosystem list and 1st in Southeast Asia. While Malaysia’s startup ecosystem has become competitive, more work needs to be done before Malaysia can stake its claim as one of the top 20 global startup ecosystems.
In Singapore, cohesive and consistent government intervention is leading it to become Southeast Asia’s and Asia’s next big tech hub. From welcoming regulatory policies to comprehensive and systematic approaches toward fostering a robust and conducive startup ecosystem. Furthermore, Singapore has streamlined and consolidated its government funding entities. This exercise resulted in an effective and catalytic role within the country’s startup ecosystem as it has fewer but stronger entities, tightened coordination and alignment between the agencies, and shared operating support services. The Malaysian government must take a leaf out of Singapore’s book in its quest to create a similar ecosystem and work hand-in-hand with the private sector.
Opportunities in the Startup Ecosystem
In today’s capitalistic economy, the perception that private businesses are the key growth drivers, and that government should just focus on providing social public goods that are not provided due to market failures, is still prevalent. It is unfortunately often forgotten, the most important role the government has played in driving the growth of an economy – socialising risks.
To quote John Maynard Keynes from The End of Laissez Faire:
“The important thing for government is not to do things which individuals are doing already, and to do them a little better or a little worse; but to do those things which at present are not done at all.”
Innovation is, undoubtedly, an extremely risky venture. With all the abovementioned government interventions, the private sector should see this as an opportunity to venture and participate in the startup ecosystem. The conventional returns per unit of risk has improved as the de-risking activities have been undertaken for potential returns to be reaped.
Whilst venture capitalists generally provide for financial capital, they also play a vital role in opening doors for business opportunities through their network capital. Corporate industry leaders can also play a role in being mentors for the next generation of entrepreneurs, leveraging of their veteran status in the industry. These improve the chances of breakthroughs through technology innovation, the economic growth’s biggest multiplier of the production function.
The hope is that with the participation of both public and private players, the startup ecosystem will move towards being ultimately self-sustaining.
Furthermore, Penjana Kapital was also invited to the Wild Digital Southeast Asia 2022 which witnessed the gathering of Southeast Asia’s biggest players and leaders of the tech landscape – each of them keen to share their most exciting ideas and learnings from their successes and discuss the upcoming trends that are propelling Southeast Asia into the global arena. Penjana Kapital’s CEO, Taufiq Iskandar, was one of the panellist during the event’s first panel session titled Changing Gears: Malaysia’s Race to Become a Digital Nation” alongside Shahril Hamdan (Economic Advisor to the Prime Minister) and Gopi Ganesalingam (SVP of Ecosystem Development Division, MDEC). The event was also blessed by the presence of the Malaysia Minister of Finance, YB Senator Tengku Datuk Seri Utama Zafrul Tengku Abdul Aziz.
Taufiq also spoke during the KL Venture Finance Forum 2022, Malaysia’s first Venture Finance forum that gathered local and international speakers from the regulatory and finance sectors, as well as from Malaysia’s pool of successful start-ups and technology unicorn. Themed “Accelerating Start-Ups”, the forum was held for it to become a strategic platform for the speakers to share their expertise in an active discourse on how start-up funding is evolving in the region particularly the role of venture finance as an alternative financing for tech start-ups, as well as key opportunities, challenges, and current trends in the start-up space.
Penjana Kapital also attended Experience Ventures 2022 which was hosted by Petronas Ventures, the corporate venture capital arm of Petronas. The event was held to feature Petronas Ventures’ aspirations and strategies to support Petronas’ business growth and sustainability agenda. The twoday event was attended by well-known players in the venture capital space as well as a few of Petronas Ventures’ investees. Ng Yi Chung (or better known as YC), Partner at AC Ventures Malaysia, was one of the presenters during the event, where he spoke about the emerging trends in the mobility space. AC Ventures Malaysia is one of the fund managers under Penjana Kapital’s DPN programme.
We applaud everyone’s commitment in supporting events such as the above that will hopefully create high-quality dialogues between key stakeholders in the venture capital space. With greater participation among various parties in similar events, Southeast Asia’s venture capital ecosystem will flourish.
We have attached a few pictures from the abovementioned events below for your viewing pleasure.
YCombinator Regional Startup School
KL Venture Finance Forum 2022
Wild Digital Southeast Asia 2022
Experience Ventures 2022
- Full import and excise duty exemptions for imported CBU EVs until 2023.
- Full import and excise duty exemptions and SST waiver for locally assembled CKD EVs until 2025.
- Road tax exemption and personal tax relief of up to RM2,500 for EV owners for costs relating to EV charging hardware and services until 2023.
|DISCLOSURES AND DISCLAIMER
This Newsletter is strictly informational and is issued Penjana Kapital Sdn Bhd (“PKSB”) on the basis that it is only for the information of the particular person to whom it was provided. This document may not be copied, reproduced, distributed or published by any recipient for any purpose unless Penjana Kapital Sdn Bhd’s prior written consent is obtained. This newsletter has been prepared for information purposes only and is not intended as an offer to sell or a solicitation to buy any securities, and/or any other product in Public or Private markets. Penjana Kapital Sdn Bhd is not making any recommendation to buy any securities or other product and the information provided should not be taken as investment advice.
It has been prepared without regard to the individual financial circumstances and objectives of persons who receive it. Penjana Kapital Sdn Bhd has no obligation to update its opinion or the information in this newsletter and Penjana Kapital Sdn Bhd recommends that you independently evaluate particular investments and strategies and seek the advice of a financial adviser prior to entering into any transaction. The appropriateness of a particular investment or strategy will depend on your individual circumstances and objectives. The information herein was obtained or derived from sources that Penjana Kapital Sdn Bhd believes are reliable, but while all reasonable care has been taken to ensure that stated facts are accurate and opinions fair and reasonable, we do not represent that it is accurate or complete and it should not be relied upon as such. All opinions and estimates included in this newsletter constitute our views as of this date and are subject to change without notice.
Penjana Kapital Sdn Bhd is not acting as your advisor and does not owe any fiduciary duties to you in connection with this newsletter and no reliance may be placed on Penjana Kapital Sdn Bhd for advice or recommendations of any sort. Nothing in this newsletter shall constitute legal, accounting or tax advice, or a representation that any transaction or investment is appropriate for you taking into account your investment objectives, financial situation and particular needs, or otherwise constitutes any such advice to you. Penjana Kapital Sdn Bhd makes no representations or warranties, express or implied, with respect to the accuracy of the information or fitness for any particular purpose and does not accept any liability (including but not limited to any direct, indirect or consequential losses, loss of profits and damages) for any use you or your advisors make of the contents of this newsletter or for any loss that may arise from the use of this newsletter or reliance by any person upon such information or opinions provided in the newsletter. This newsletter has been prepared by the analysts of Penjana Kapital Sdn Bhd. Facts and views presented in this newsletter may not reflect the views of or information known to other business units within Penjana Kapital Sdn Bhd. This information herein is not intended to constitute “research” as it is defined by applicable laws. This newsletter is not directed to or intended for distribution to or use by any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation. The information provided in this document has been obtained or derived from sources believed to be reliable. Penjana Kapital Sdn Bhd does not guarantee its accuracy or completeness and does not assume any liability for any loss that may result from the reliance by any person upon any such information or opinion. Such information or opinions are subject to change without notice, are for general information only and is not intended as an offer to sell or a recommendation/ solicitation to buy any securities, foreign exchange or other product.