Malaysian VCs invested US$80mil in 2013

  • 41% focused on bridge/ pre-IPO stage, followed by growth and early stage
  • 2013 was a watershed year for VC industry, says outgoing MVCA chairman

Malaysian VCs invested US$80mil in 2013LAST year was described as a ‘watershed year’ by the outgoing chairman of the Malaysian Venture Capital and Private Equity Association (MVCA), Jamaludin Bujang (pic).
He cited the continued support of the Malaysian Government in allowing public-funded venture capitalist (VC) bodies, such as Malaysia Venture Capital Management Bhd (Mavcap), to keep betting on tech entrepreneurs.
Jamaludin, also the chief executive officer of Mavcap, lauded the soon-to-be launched Malaysian Global Innovation and Creative Centre or MaGIC, backed by RM70 million (US$21.4 million) in funding.
Mavcap had launched the first fund from its third Outsourcing Partners Programme (OSP3), with the target of launching a US$100-million fund, he revealed last week at the annual MVCA dinner and awards night held to celebrate the successes and achievements of the VC industry.
The private sector has played its part too, with Jamaludin pointing to the likes of MyEG Services Bhd which is investing RM20 million into a RM60-million Cradle Seed Venture Fund, together with Cradle Fund Sdn Bhd, non-profit agency under the Ministry of Finance; and media company Star Publications (M) Bhd, which launched a RM20-million pre-seed and seed fund.
[RM1 = US$0.30]
In terms of industry data, total VC funds invested in 2013 was around US$80.5 million (RM264 million), an increase from the US$70.1 million (RM230 million) in 2012. Most of the investments focused on the bridge/ pre-IPO (initial public offering) stage, with around 41.4% of total investments. This was followed by expansion/ growth-stage and early-stage investments.
Beyond such institutional funds, he pointed to the formation of the Malaysian Business Angel Network (MBAN) and the angel tax incentive scheme to encourage more risk-taking at the individual investor level.
In the works is also a review of Malaysia’s bankruptcy laws to making them more supportive of entrepreneurs, while the establishment of an unlisted market platform is also in the works.
These are just some of the regulatory policies that are being reviewed in order to support and boost the formation of Malaysia’s innovation-led economy. 

Malaysian VCs invested US$80mil in 2013

The MVCA annual dinner and awards night also saw some parties being recognised with six companies recognised under the Outstanding Investee Companies of 2013 category. These were iGene, iMoney, Macrokiosk, MyTeksi, MyWave and Trisystems Engineering.
MyTeksi general manager Adelene Foo said Cradle’s support was pivotal during the startup’s initial phase of product development.
“It led to quicker commercialisation of our product and service to Malaysians, who are now able to enjoy a more reliable and safer form of booking a taxi,” she said.
Another awards category was for Supportive GLC (government-linked company) and Industry Partners 2013 with five parties recognised: Agensi Inovasi Malaysia (AIM); Ekuiti Nasional Bhd (Ekuinas); Mavcap itself; Multimedia Development Corporation (MDeC) and the Northern Corridor Implementation Authority (NCIA).
Recognition was also given for four exits during 2013, and here Mavcap received recognition for its exit from Aexio Software which was acquired by InfoVista of France.
Mavcap had invested RM1 million in Aexio in 2010, and enjoyed an exit with a 46% IRR or Internal Rate of Return, with the sale price estimated to be between RM12 million and RM15 million.
Related Stories:
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TeAM urges tax incentives for corporates, review of bankruptcy laws
Week in Review: We need to get behind the MaGIC CEO
Mavcap on verge of launching third round of outsourced funds (OSP3)
Malaysia launches national angel network
The real message behind the Angel Tax Incentive
Angels with pitchforks, VCs who don't venture
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