Penjana Kapital Sdn Bhd ("PKSB") Overview
Penjana Kapital Sdn Bhd (Penjana Kapital) was incorporated on 1 July 2020 as part of the Government of Malaysia’s initiative to accelerate the development of a future innovation economy.
Its main role is to stimulate the Malaysia’s economy by futureproofing Malaysia businesses through innovation from start-ups, funded by private capital from strategic international and private domestic investors, matched by the government and in turn creating a vibrant and sustainable venture capital (VC) industry in Malaysia.
Penjana Kapital administers and facilitates the deployment of the Dana Penjana Nasional (Dana Penjana), a matching fund-of-funds program where the Government of Malaysia will match, on a 1:1 basis, funds raised by the VC fund managers from foreign and private local investors.
Governance & Operationalisation: Penjana Kapital Sdn Bhd
Pembangunan Modal Penjana Sdn Bhd, a company under the Minister of Finance Incorporated, has established Penjana Kapital as its subsidiary to allocate the Government’s portion of the funding. Penjana Kapital will have a Board of Directors and an Investment Panel (IP).
Penjana Kapital will have three layers of governance.
- Board of Directors (BoD)
The BoD will set the overall strategic direction of Penjana Kapital, under the guidance from the Ministry of Finance. They will also review and approve investments recommendation by the IP.
- Investment Panel (IP)
The IP will leverage on their specialised expertise and experience to drive decision making for Penjana Kapital. They will review and refine investment strategies and guidelines; as well as assess the selection of venture capital by Penjana Kapital’s management team.
- Management team
Penjana Kapital’s management team will be responsible to monitor the venture capital fund managers, amongst others. This will include the monitoring of financial and non-financial deliverables expected from each VC fund manager.
Penjana Kapital’s senior management personnel will also sit in the Investment Committee (IC) of the portfolio funds to ensure that funds remain aligned to Dana Penjana’s objectives.
Penjana Kapital’s BoD and IP meeting will be held every quarter (at the minimum). The management team will be responsible for reporting the performance of all the funds under the Dana Penjana initiative to the members of BoD and IP.
Yes. Each fund will be managed by a joint entity between the foreign and local venture capitals, and the fund must be domiciled in Malaysia (i.e. set up as either Malaysia Sdn. Bhd. or Labuan company).
- Firm Background
- Track Record & Experience
- Investment Plan & Strategy
- Knowledge Transfer Plan
The due diligence process to select the foreign venture capital has been done in three stages.
- Screening due diligence
Review and evaluate all proposals received throughout the application process, based on a standardised selection framework. Proposals that are determined to fit Dana Penjana Nasional’s investment criteria will be escalated to the next stage.
- Business due diligence
Further investigation to determine the viability of the proposed funds’ strategies, the track record of both foreign and corresponding local venture capitals, as well as alignment with Dana Penjana Nasional’s vision. Subsequently, a meeting or discussion is held with the representatives of all venture capitals shortlisted to further assess capabilities and future plans.
- Legal due diligence
Once a particular proposed fund has successfully completed the screening and business due diligence, the investment team of both foreign and local venture capital firms will meet Penjana Kapital management team to negotiate the terms of investments, subject to final approval by the Investment Panel and the Board. Subsequently, lawyers from both sides will complete a legal review before finalising the deal.
Penjana Kapital will be operating a Fund of Funds (FoF) model, which means Penjana Kapital will not be involved in the day-to-day management of the funds. However, to ensure that the funds remain aligned to Dana Penjana’s objectives, a representative from Penjana Kapital will sit in each fund’s Investment Committee (IC).
On that note, before the target investment can be deliberated in each fund’s Investment Committee, the deal company or potential investee must satisfy all requirements Penjana Kapital’s internal evaluation matrices.
Penjana Kapital employs an extensive due diligence process when it comes to investing in a start-up (potential investees). Start-ups proposed for investment are required to go through Pre-Screen and Investment Evaluation phase before the deal is tabled in the VC fund’s respective Investment Committee.
Pre-Screen Phase – is primarily utilized to ascertain and ensure mandate compliance.
Investment Evaluation Phase – is conducted to evaluate the commercial viability of potential investees.