Week in Review: Of funding, courtship and zombies
By A. Asohan May 29, 2015
- The funding floodgates haven’t opened for the Malaysian startup ecosystem
- Agencies like Cradle are trying new things, why can’t corporates do the same?
MY thoughts this week turn to funding, and early-stage funding at that.
It’s that stage when your startup is teetering like a baby, trying to make that transition to toddler, when any kind of crutch can spell the difference between finally learning to walk, and falling on its bottom.
Many people, including we at Digital News Asia (DNA), have spent the last few years decrying the lack of venture funding available to the Malaysian startup ecosystem, although some are confident that this will change for the better beginning this year, mainly thanks to the number of venture funds which have been casting their eyes at Asean.
Indeed, at a panel discussion organised by DNA and the Technopreneurs Association of Malaysia (TeAM) last year, ecosystem players were confident that so much money would be pouring in that even a lot of “silly deals” will be made.
Well, that hasn’t happened … yet. The ‘mega” funding deals we have seen so far this year (or very late last year) are still happening down south, even when they do involve Malaysian-founded startups such as GrabTaxi, which has moved its headquarters to Singapore.
When it does happen here, it doesn’t really rain money, but at least the drought is over. Small sums. Enough to get some of you started, but hardly sufficient for a nation aiming to be a regional startup hub of some sort.
On the other hand, Malaysian startups have been luckier than those in most other countries, with a lot of government grants available, if you can handle the red tape. But with the Government dialling back on such grants, the worst hit are going to be the early-stage companies.
They can’t really bank on venture capitalists (VCs), especially in Malaysia where VCs seem more risk-averse.
Which was why I was glad to see Cradle Fund’s co-investment initiatives finally see ‘pen to chequebook,’ with the announcement that its co-investment partnership with OSK Technology Ventures will be investing in education services provider Sync and recruitment portal MauKerja, to the tune of RM1 million (US$275,000) each.
“Finally,” I teased Cradle Fund chief executive officer Nazrin Hassan on Facebook, and he riposted with “one cannot rush the courting process.”
It’s pretty much characteristic of Nazrin to look at it as more than just an investment, but as a relationship. Cradle has been thinking outside the box on how to achieve its mission of nurturing such companies, armed with a reduced budget, while trying to straddle that fine line between supporting and spoon-feeding.
Which brings me to Gabey Goh’s piece on EMC Ventures president Scott Darling, not only for his straight-talking – “The painful ones are the ‘zombies’ that cling to life and suck all your time and attention … the ones that go nowhere and just limp along at a 5-10% growth rate.” – but also because of his views on why corporate venture capitalists need to get in at the early stage.
As I read that, I could only shake my head at why Malaysian corporates – there are too few exceptions – are not thinking the same way. Why they are not stepping up to fund an early-stage company or two.
Walk into ground zero of disruption. Get in there early. Be part of the disruption. Go on!
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