[ad_1]
KUALA LUMPUR,: Penjana Kapital Sdn Bhd’s success in attracting eight foreign venture capital (VC) firms will result in a trickle-down effect that will grow and enhance the capacities of the local ecosystem and startups through the transfer of knowledge, in addition to stimulating the opportunities of the network.
“The commitment of foreign venture capital will also encourage private capital to support promising local startups and companies, alleviating their challenges as a result of the pandemic,” said Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz.
Penjana Kapital has attracted eight foreign venture capital managers, namely from the United States, South Korea, China, Indonesia and Singapore, and local partners to invest up to RM1.57 billion in Malaysian startups.
The amount is made up of RM600 million from the government combined with a 1: 1 basis of the commitment of RM600 million by venture capital fund managers and the potential investment of another RM370 million in companies matching your risk and investment profile. .
Start-up financing requires professional investors who are interested in and truly understand the asset class, who should be paired with venture capital fund managers with business acumen and commitment to the effort, and startups that are ready to host. venture capital investments, he said. .
This process generally involves proper business planning with defined growth targets, proper business valuation, and possible exit strategies for investors.
“Knowing and understanding this process makes Penjana Kapital’s success in attracting these investors that much more commendable, especially during these difficult times. And what these venture capitalists tend to invest in are in new sectors or new ways of managing existing industries, which is good for the long-term development of a knowledge-based economy, ”he told Bernama today.
Penjana Kapital, incorporated on July 1, 2020, is run by the Nasional Penjana Fund. The setup is part of the government’s initiative to accelerate Malaysia’s economic recovery.
It is intended to catalyze and rebuild Malaysia’s private equity investment space, and is expected to focus on technology-based startups. The first indications show that the sectors in which they are interested include fintech, edutech, agritech, mobility and artificial intelligence.
In addition to Malaysia’s business-friendly investment ecosystem, these new sectors will also be supported by the government’s RM21 billion national digital infrastructure plan, Jalinan Digital Negara (Jendela), designed to enhance Malaysia’s national digital connectivity. and optimize the use of the spectrum.
Tengku Zafrul said that one of the key factors in Penjana Kapital’s success is that in selecting these venture capital fund managers, it implemented a rigorous evaluation process that was verified and validated by an external independent global consulting firm.
“They developed a highly structured program that includes setting key financial performance benchmarks, as well as determining strategic / non-financial objectives, such as knowledge transfer requirements.”
For example, the eight venture capital fund managers and their local partners were selected through a rigorous evaluation and due diligence process by Penjana Kapital’s investment panel.
Two CVs were selected per stage of the CV life cycle.
The seed / co-creation stage will be a start-up launch pad that will co-create companies or provide seed capital to early stage companies, he explained.
“The Series A / B stage will invest in post-revenue companies that have passed the ideation stage. The next stage, the growth stage, will focus on companies in the expansionary stage. And finally, risk debt will provide short- and medium-term debt financing for companies that are not traditionally covered by banks, ”explained Tengku Zafrul.
Second, with the pandemic accelerating the adoption of digitization, the “ground has softened” for new investments in technology-based sectors based on the real needs of our people, particularly in sectors such as edutech to develop remote teaching / learning and agriculture. technology to develop food safety.
“Third, the relationship also enables Malaysian startups and companies to take advantage of the connections and added value that regional and global investors have. That in itself is a rich environment to hone ideas and concepts for eventual commercialization, ”he said.
When asked how the government would ensure that the capital remains within the Malaysian ecosystem, Tengku Zafrul said that a key criterion of the fund is minimal deployment in Malaysian startups. Prospective investees in Asia must bring tangible economic benefits to the Malaysian economy to qualify for 1: 1 funding match from the government.
“This will encourage private equity to continue supporting promising local startups and companies.
“Apart from that, we have seen many investors continue to invest, thanks to our very attractive investment ecosystem and tax incentives, and the strong promotion of the Malaysian government as an ideal base or springboard to access the 648 million ASEAN market.” , said. .
Through the Nasional Penjana Fund move, he said it was encouraging to see the involvement of venture capital fund managers in the request for proposals process conducted by Penjana Kapital.
“This indicates a great interest and confidence from the international investment community towards the growth prospects of the Malaysian economy and its emerging industry.”
Regarding the knowledge transfer program (KTP), Tengku Zafrul said it is expected to benefit three main groups: the venture capital fund management industry, start-ups and the general public. This program is to nurture and develop talent within the venture capital ecosystem.
He expects KTP to create significant and highly qualified jobs, either in those identified investment areas or within the VC ecosystem.
“It is expected that, in the medium and long term, more than 700 jobs will be created directly. Subsequently, the network effect will mean the creation of more than 1,000 jobs, either through affiliated companies, events or training. In total, at least 1,800 highly skilled jobs will be created, ”he said.Called
[ad_2]
