TeAM’s bold plan to launch US$50 mil venture fund
By Chong Jinn Xiung & Karamjit Singh November 16, 2016
- Fund to complement newly launched ASEAN connect programme
- Aiming for its investees to be potential acquisition for conglomerates
IT IS a bold and ambitious plan by the Technopreneur Association of Malaysia (TeAM). From being the voice of technology entrepreneurs in the country, to being a spearhead for Southeast Asia (SEA) market access to not just Malaysian tech companies, but any growth stage startup globally that wants to make inroads into region.
And the ambition is even bolder when you consider that TeAM is now looking to raise a US$50 million (RM216 million) venture fund and become a VC itself.
This surprising announcement came during the launch of TeAM’s ASEAN Connect programme yesterday which is designed to help tech companies with their market entry in the various SEA countries. ASEAN or the Association of Southeast Asian Nations is the regional organization comprising of the 10 SEA nations to promote intergovernmental cooperation and socio-economic ties.
To get a sense of why TeAM, as industry body, is making an audacious leap to becoming a VC and invest in startups, DNA posed some questions to TeAM president, Fadzli Shah on why he is leading TeAM into new territory.
Digital News Asia: Can you share the motivation for wanting to raise a fund to invest in growth startups?
Fadzli: We see that there is a need for more players to enter the market with the motivation to build SEA based companies. The barrier a growth company in Malaysia is facing will be "how do I get my company into the Indonesian/Thailand market." Hence we think what we are doing as TeAM in the ASEAN connect programme can be complimented with a fund that is ready to back the companies that are ready to go into one or more ASEAN countries.
Will TeAM set up a management company to run the fund? Will you be involved in the operations of the fund management company?
Fadzli: The venture capital management company will be spun off from TEAM as we have done in the past (with Cradle and the Malaysian Business Angels Network or MBAN). Izwan Ismail, together with me, are leading the efforts and will be actively involved with the fund moving forward.
What type of companies will you be looking to invest in and will you be looking mainly at Malaysian companies?
Fadzli: We are agnostic in investment verticals and will look at all companies that have a presence in at least one ASEAN market and are expanding into additional ASEAN countries. We are devising a plan on our first couple of investments.
When is the first close of the fund and what type of LPs are you looking for?
Fadzli: We concentrate on strategic LPs that can co-invest with us, either influential business leaders/family-funds or conglomerates and work backwards from there, to invest in companies that can leverage our LPs’ networks and resources for market penetration. This also aligns our investment strategy such that our investees are potential acquisition for these large conglomerates. The first close of the fund would coincide with the deal flow we assess from the Plugged-In trips.
Beyond the funding, what other value can you offer the startups?
Fadzli: With the backing of TeAM, we are equipped with plenty of successful entreprenuers that are looking to mentor the companies that we have invested in. With the relationship that we are building with each country, we can provide a soft landing for companies when they enter a new market and immediately present them with partnership opportunities. We are also planning a programme called The Renifery, where companies will go through processes of cleaning up their books and instilling operational processes to prepare them for the next round of investors.