- International Trade, Communications ministries, MoF, MDEC, SME Corp come together with GLCs, investors
- Goal is to help draw attention to unpolished gems in startup ecosystem, deepen corporate engagement
IN yet the latest sign of the deepening reach of the Digital Economy in Malaysia, and of the value government sees in the startup ecosystem, yesterday saw a rare occurrence where two ministers from different ministries jointly hosted and launched a new pitching platform for startups and scaleups in collaboration with three other government parties.
Mustapa Mohamed, the Minister of International Trade and Industry Jailani Johari, Deputy Minister at Ministry of Communications and Multimedia were the two minsters involved.
The other collaborators – Ministry of Finance, Malaysia Digital Economy Corporation (MDEC) and SME Corp – are seasoned players in the startup ecosystem.
Combined, the five parties jointly organised a pitching platform to enable technology startups and scaleups to pitch directly to government linked corporations (GLCs) and government linked investment companies (GLICs), Minister of Finance Incorporated (MKDs) companies and VCs.
Mustapa hails the establishment of this new funding platform an important milestone for Malaysia. “The Government intends to facilitate those who want to scale up by further accelerating their growth to potentially become regional and, eventually, global players. Therefore, the commitment and support from local GLCs, GLICs and VCs is crucial to avoid potential local startups and scaleups from going abroad to seek financial assistance provided by foreign companies and consequently set-up their businesses outside the country,” he said.
Not only did the two ministers stay for the entire half-day event, but both also recognised the weak link in Malaysia’s startup ecosystem, corporate involvement, and urged corporate players to start engaging with startups as a way for them stay relevant in the digital economy.
Hence Jailani urging, “Malaysian GLCs and GLICs should play a bigger role in the Digital Economy. They should look into raising capital in technology investment.”
Mustapa acknowledges the various pitching activities going on but feels the need for a more efficient platform to bring the “many unpolished gems” in the startup ecosystem to the attention of funders, be they VCs or corporate players or government funds. “I am urging my team to come up with such an efficient platform to be the pipeline for this flow of startups and scaleups to meet investors, and we plan to have more such sessions as this.”
Two scaleups, Forest Interactive and MDT Innovations, and two startups, The Lorry and Fave, were selected to pitch to a panel of prospective investors comprising 12 GLCs, six GLICs, nine MKDs, and six local VCs. Ten other startups and nine scaleups were also invited to attend and network with the investors.
The criteria for how the startups and scaleups were selected was not made clear and needs to be for the initiative to gain credibility.
The digital economy which now accounts for over 17% of Malaysia’s GDP represents the future with the government recognising that more needs to be done to drive growth for Malaysian companies and SMEs. The new pitching platform, yet to be branded, has been created to ease access to ready capital and to get more GLCs to participate.
While a handful of GLCs have made initial investments into this area the government recognises that much more needs to be done and wants the corporate sector to step as well to address the funding gaps in the startup space.
Two more pitching sessions are being planned, tentatively in July and August with more GLCs, GLICs, MKDs and VCs participating.