New funding source for Malaysian startups

Worth US$1.4 million, the Technopreneur Venture Management is aimed at fixing gap between pre-seed and seed funding, says its administrators.
Written by Edwin Yapp, Contributor

KUALA LUMPUR--Local infocomm technology (ICT) entrepreneurs who need startup capital can now turn to a new venture fund, dubbed Technopreneur Venture Management (TVM).

The 5 million ringgit (US$1.4 million) fund is jointly administered and managed by MIRC-Ingenious Capital Partners (MICP). The MICP is a joint venture between political party-backed incubator Malaysian-Chinese Association (MCA) ICT Resource Center (MIRC), and local financial services company Ingenious Haus Group.

Speaking at the TVM launch here Thursday, MICP CEO William Du said there is currently a gap between pre-seed and seed investments funded by traditional venture capitalists (VCs).

"Most VCs only fund companies that have an established management team and a proven track record," Du said in his keynote address. "We aim to bridge the gap between early- and late-stage funding for companies involved in the ICT arena."

Du noted the MICP is focused on investing in early-stage ICT companies that require startup or expansion capital involved. The MICP is targeting to inject between 100,000 ringgit (US$27,590) and 500,000 ringgit (US$137,950) in each local startup over the life of the investment, he added.

Du explained: "500,000 ringgit may seem small to some entrepreneurs, but our aim is to help companies 'bootstrap' themselves during the early stage of their business.

"Ultimately, it not about how much money you have to start with but how good your deal is," he said.

The MICP, however, will be looking to boost the TVM fund by another 10 million ringgit (US$2.8 million) by approaching other potential investors in the coming year, Du said.

He added that the dealflow in Malaysia now is "excellent", with "a wealth of opportunities" in Klang Valley and Penang. Dealflow is a term typically used by investment firms and venture capitalists to refer to the number of business opportunities or offers. A dealflow is considered healthy if it helps churn sufficient revenue to maintain the organization's operations.

According to Du, the entrepreneurial ecosystem--supported by the MSC Malaysia infrastructure--is stronger than ever before.

"There are some very innovative ICT companies that fall right in our investment criteria sweet spot," he noted. "We are looking to take up equity in good companies and exit after having helped them succeed."

To apply for the TVM fund, companies need to submit a 10-point business proposal to the MICP, he said. The fund manager will then evaluate the viability of the business plan, after which, MICP will review the potential applicant's business model, conduct due diligence and finalize the investment structure.

He added that this process should take between one and two months, depending on whether additional data is required. Interested parties can e-mail Du for more information.

In July, Cradle Fund and the Technopreneur Association of Malaysia jointly launched an initiative to provide local technopreneurs advice on getting funding.

Edwin Yapp is a freelance IT writer based in Malaysia.

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