Two Malaysian government entities, The Malaysian Global Innovation & Creativity Centre (MaGIC) and Penjana Kapital Sdn Bhd (Penjana Kapital) are collaborating to unlock potential investment opportunities for innovative start-ups, supporting them to scale and grow regionally and beyond.
In bridging the funding gap faced by start-ups, MaGIC will funnel its alumni, in particular seed-stage start-ups, to venture capitals (VCs) under the Dana Penjana Nasional (DPN) program, a government fund-matching initiative for venture capital firms. MaGic is a government agency under Science, Technology and Innovation Ministry.
For seed stage, the VCs include Tenggara Capital Partners – IMO Ventures and The Hive SouthEast Asia – Tuas Capital Partners.
“Being a key enabler to the ecosystem, we are aware of the challenges faced by start-ups as we regularly engage with them. We have always stressed the importance of capacity building, and we are happy to identify start-ups with potential and funnel them to Penjana Kapital and its partner VCs. Funding has always been a key challenge for start-ups to scale up, and we seek to bridge this gap via the DPN,” said MaGIC Acting Acting Chief Executive Officer Amiruddin Abdul Shukor.
The collaboration also comes as startups in Malaysia compete for funding with better-funded peers in the region in Singapore, Indonesia, and Vietnam.
By bridging the funding gap, MaGIC and Penjana Kapital aspire to reorient private capital for innovative start-ups, attract global and regional VCs into Malaysia, as well as elevate knowledge transfer, talent development, and creation in the Malaysia ecosystem, MaGIC said in a statement on Monday.
Administered by Penjana Kapital, the DPB program is part of the government’s Short-Term Economic Recovery Plan (PENJANA), aiming at bridging the funding gap in the country by incentivizing private capital to facilitate the growth of start-ups and create an enabling environment for these start-ups to scale and expand their reach internationally.
The government announced earlier it will match MHR 600 million ($144.16 million), on a 1:1 basis, of the funds raised by the VC fund managers from foreign and private domestic investors, with a target allocation of MYR 1.2 billion ($288.32 million).
At its first close at end-May 2021, Penjana Kapital has raised 850 million ringgit, with more than half from foreign investors in Hong Kong, South Korea, and Singapore.
MaGIC is one of the key ecosystem enablers in nurturing the growth of start-ups in Malaysia. The interventions that MaGIC offers revolve around capacity development, collaborative entrepreneurship, facilitating market and capital access to the start-ups.
Since its commencement of operation in 2014, MaGIC’s programs have impacted over 100,000 aspiring and seasoned
entrepreneurs, 2,800 start-ups, and created an economic value of 2.1 billion ringgit.
Penjana Kapital Chief Investment Officer Taufiq Iskandar said the collaboration with MaGIC will boost DPN’s objectives to overcome the innovation funding gap and accelerate Malaysia’s economic recovery whose momentum has been derailed by a more persistent COVID-19 pandemic.
“MaGIC’s experience in the start-up ecosystem, in particular tech start-ups, will help us in our quest to streamline the digitalization and automation of Malaysian businesses through innovation. We are aware that seed-stage start-ups face some funding challenges, and in collaboration with MaGIC, we believe we can help them overcome these,” he said.