KUALA LUMPUR, May 19 (Reuters) – Eight Malaysia-based venture capital (VC) firms have raised 676 million ringgit ($163.58 million) under a government funding programme for the local start-up industry, a Finance Ministry unit said on Wednesday.

The company, Penjana Kapital, said in a statement that 372 million ringgit of the total came from foreign investors, specifically from Hong Kong and South Korea.

“These funds are crucial to spur our start-up ecosystem and encourage innovation, particularly in the face of COVID-19 challenges,” minister Tengku Zafrul Abdul Aziz said.

The funds raised exceeded Penjana Kapital’s initial fundraising target amount by almost 200%.

The VC fund managers will first invest a total of 110.15 million ringgit in eight start-ups in the e-commerce, agricultural technology, fintech, health technology, transport and property sectors.

Penjana Kapital was set up under the ministry to operationalise the government’s matching fund-of-funds programme, which is part of Malaysia’s Short-Term Economic Recovery Plan.

The government will match 600 million ringgit, on a one-to-one basis, of the funds raised by the VC fund managers from foreign and private domestic investors, with a target allocation of 1.2 billion ringgit. ($1 = 4.1325 ringgit) (Reporting by Liz Lee, editing by Louise Heavens and Kim Coghill)

(Web source: https://www.reuters.com/article/idUSL2N2N60ZZ)