Areas to look at include robotics, bioengineering, artificial intelligence, etc
Also looking to launch another RM40mil commercialisation fund in 2014
MALAYSIAN Debt Venture Bhd (MDV) celebrated its 10th anniversary last November, and its chief executive officer Zubir Ansori Yahaya (pic) now wants to see the venture debt agency expand its reach and become the financier for new technology.
Areas such as robotics, artificial intelligence and bioengineering are possibilities, he tells Digital News Asia (DNA).
“We have to move at a faster pace, in tandem with the dreams of the country to become a high-income, high-value-add economy,” he says.
In an earlier article, DNA covered MDV’s track record as a key ecosystem enabler using venture debt as its tool, and as major player in its existing areas of ICT (information and communications technology), biotech and especially green technology, which saw strong growth last year.
Zubir sees an opportunity for MDV to be a catalyst for emerging high tech areas, just as it was for the ICT sector in its first 10 years when banks were reluctant to lend to such companies.
That has now changed for the better. Over the first past few years, MDV has seen its ICT companies seek commercial bank funding too, a situation that had been non-existent for a long time. They are now able to access overdraft and trade lines, and other services, from banks.
“This shows that banks are now moving to help tech companies,” Zubir says. MDV has played an indirect role here, giving the banks a greater measure of confidence to lend to tech companies it already extends its debt funding services to.
Zubir nows wants to play the same catalyst role in the emerging areas of technology where, as he says, “people do not believe in the potential of the technology or the business model.”
He wants MDV to be there to support any such company that may need help to deliver its projects.
“To be able to do that, we ourselves have to become more innovative than before and come up with new products for the market,” he admits.
And move at a faster pace too. “We want to be there first to be able to lend to them,” he says.
While it aims to expand its portfolio into emerging high tech, MDV is not going to drop its traditional strength in helping ICT, green tech and biotech companies. In fact, Zubir sees green tech and biotech as important areas to help the agency achieve some balance in its loan portfolio, which is currently skewed towards ICT.
Nothing wrong in that itself, but with ICT loans being short term in nature, MDV is constantly working to keep its money out in the system, helping companies. Indeed, Zubir shares that its pipeline at any one time consists of RM1 billion (US$319 million) in potential loans.
This is where going after green tech, with its typical three- to 10-year loan period and with amounts of between RM5 million and RM70 million (US$1.6 million and US$22 million), helps reduce the velocity of deals MDV has to keep reaching for.
This would then allow it to focus its time on the new area of emerging high tech that it is now looking at.
At the same time, MDV is also planning to seek from the Malaysian Government another RM40 million (US$12.8 million) for a commercialisation fund, just like the one it received in 2011.
And as with the 2011 fund, the money will be used to help companies with a ready product, to help them get their product into the market and commercialise it.
“We know that our forte lies in assessing projects. We are now taking it and applying it in new areas,” says Zubir of the new high tech space MDV wants to be a major player in.
That’s got to be good news for anyone with a high tech offering who may have been banging their heads against the banks, hoping to get a loan.
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