CSVF1 to invest RM1-3mil on Malaysian tech startups at various stages
Initial fund size is RM40mil, aims to grow to RM100mil in next 12mths
AFTER many months of planning, discussions and getting feedback from various stakeholders, the much-awaited Cradle Seed Ventures Pte Ltd has finally launched, incorporated in the offshore financial centre of Labuan.
Cradle Seed Ventures, the venture capital arm and wholly-owned unit of Cradle Fund Sdn Bhd, a non-profit under Malaysia’s Ministry of Finance, will manage the Cradle Seed Ventures Fund 1 (CSVF1).
CSVF1 aims to invest from RM1 million to RM3 million (US$272,000 to US$815,000) into promising and scalable Malaysian technology startups at the pre-Series A, Series A and growth stages – for a minority stake.
And it is already looking at 30 to 40 startups. “We hope to close at least two investment deals by the end of this year,” Cradle Seed Ventures chief executive officer Aziz Hussein (pic above) said at the official launch in Kuala Lumpur earlier today (June 4).
He said that over the next 24 months, the company hopes to invest in six to eight companies.
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CSVF1 is also open to investing into non-Malaysian companies. However, such investments will not take up more than 30% of CSVF1’s total fund size.
CSVF1, envisioned as a partnership between the public and private sectors, currently has an initial fund size of RM40 million (US$11 million), injected by the Ministry of Finance.
Aziz said he hopes to grow the fund size to RM100 million (US$27 million) within the next 12 months, mainly with the help of private sector investors.
The delay, ‘disappearance’ of MyEG
The official launch comes more than 18 months after Cradle first announced its Cradle Seed Ventures initiatives when it signed a memorandum of understanding (MoU) with My EG Services Bhd, which specialises in e-government services.
During the MoU signing in October 2013, Cradle said that MyEG was expected to bring RM20 million (US$5.4 million at current rates) to the table, a move that would have grown CSVF1’s fund size to RM60 million (US$16 million).
There were no announcements on MyEG’s participation at today’s launch, but Aziz said that Cradle Seed Ventures is currently in talks with MyEG as well as other private sector investors.
“We are still engaging with it (MyEG), but whether it wants to come in or not ...
“Because over the 18-month period, things could be the same – it may still be interested, or it may have other priorities, we are not sure about that,” he said.
When asked why it took over 18 months to officially launch Cradle Seed Ventures, Aziz said that the company had to restructure the original idea after taking into account stakeholder feedback, including that from private parties.
“Hence, what we are stating is that Cradle, being behind the initiative, will start off the fund and we will invite other parties to hopefully come in. That makes it easier, rather than to talk to multiple parties,” he said.
“It basically gives us more flexibility,” he added.
UPDATE: On Facebook, Cradle Fund chief executive officer Nazrin Hassan said that the delay was also partly caused by the national audit that it had to clear in 2014, after the 2013 Auditor General’s Report highlighted weaknesses in the management of its activities.
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