49 applications received in first window of TSFRF
By Digital News Asia June 2, 2020
- Subsequent round of applications to run for 2 weeks from 8 to 21 June
- Companies applying have average revenue of US$23,300 to US$1.6 mil
Malaysia Debt Ventures Bhd (MDV) announced, yesterday, the closing of the first application window for the RM100 million Technology StartUps Funding Relief Facility (TSFRF), which was opened for applications beginning 18 May 2020 until 31 May 2020. During this period, MDV received 49 applications, with financing amount requested between US$232,000 to US$581,000 (RM1 million to RM2.5 million), from eligible technology companies in various technology sectors including ICT, E-commerce, Logistics, Fintech, Big Data, Medical, proptech and Electric Vehicle (EV).
Nizam Mohamed Nadzri, MDV’s CEO, said that, “As the TSFRF is yet to be fully committed, the subsequent application window for the facility will run for another two weeks starting 8 June until 21 June. The gap between the application periods is to allow for MDV to proceed with the screening process by the facility’s dedicated screening committee to ensure we are able to keep to the faster processing timeframe under the facility and ensure timely disbursement to successful applicants.”
All applications will be screened based on three main criteria i.e. the company’s strategic positioning in its related segment/sector; its potential for regional/global growth; and its competitive positioning.
Factors that will be considered within the above criteria include Management, Venture Capital Investor Support, Revenue and Revenue Growth, Enterprise Value, Market Opportunity and Competitiveness. Following the screening, all applications are then required to go through MDV’s credit assessment.
“The majority of the technology companies that had applied for the TSFRF are those with strong fundamentals and viable business models that yield an average revenue of between RM100,000 to RM7 million with company valuation of between RM5 million to RM500 million,” explained Nizam.
[RM1 = US$0.23]
“However, due to the current economic and business conditions, these companies are in need of an immediate cash flow support to keep their business afloat and to continue to grow, which is what the TSFRF was developed for.”
The TSFRF, which is offered in the form of working capital and business expansion requirements, aims to provide immediate, affordable and targeted cash flow support for VC or Government agency-backed technology startups that are impacted by the current adverse economic conditions and funding disruptions. The facility is targeted to benefit between 40 to 60 technology startups to address liquidity challenges by having on-hand working capital facilities to mitigate cash flow issues going forward. The facility is offered at an interest rate of 3.50% per annum on the amount outstanding.
Since the initial announcement on the TSFRF by the Minister of Science, Technology & Innovation, Khairy Jamaluddin, MDV had received overwhelming enquiries from technology startups on the financing facility. As part of its efforts to introduce and promote the facility, MDV had arranged several webinar sessions for potential applicants in collaboration with agencies such as Malaysia Digital Economy Corporation (MDEC), Agensi Inovasi Malaysia (AIM), Scaleup Malaysia, Invest Penang and Malaysia Venture Capital & Private Equity Association (MVCA), including an open session streamed via MDV’s FB Live platform.
For further information on the TSFRF, please visit MDV’s website at www.mdv.com.my