Cradle co-investment fund surpasses RM100-mil mark
By Goh Thean Eu September 22, 2015
- Cradle and four new partners to bring in RM50.5mil more
- Agency still optimistic that it can hit its year-end targets
CRADLE Fund Sdn Bhd, an early stage grant provider, has grown its co-investment programme fund size to RM107.2 million (US$25.11 million) after tying up with four additional partners: Senior Marketing System Asia Pte Ltd (SMS Asia), East Ventures SEA 2, MOC Capital Bhd and Qeerad Holdings Sdn Bhd.
Before these latest partnerships, the combined funding available under the programme stood at about RM56.7 million (US$13.28 million). The programme now has 14 co-investment partners.
Since the co-investment initiative kicked off last year, it has funded three startups: Sync Media, MauKerja and BeMalas.
“We are targeting a total of seven co-investment deals … and to hopefully attract a total of 21 co-investment partners, by the end of 2015,” said Cradle chief executive officer Nazrin Hassan.
“There is still some work to be done in the final quarter of 2015, but god willing, we will reach those targets,” he told a press conference in Kuala Lumpur on Sept 21.
READ ALSO: Singapore’s NRF to launch third instalment of early stage fund
The co-investment programme is part of Cradle’s strategy to move away from awarding grants and towards equity funding. It hopes that 70% of its total funding will come from co-investment equity funding by 2017.
The programme also allows Cradle to diversify its value-add base.
“We look diversify our value-add through our co-investment partners’ experiences and backgrounds, which startups can leverage on,” said Nazrin.
“Some of the investors are seasoned and successful entrepreneurs, some are subject matter experts in their industries, and some can open doors to both local and international markets,” he added.
He said the programme also helps to bring more visibility to the Malaysian startup ecosystem amongst foreign investors.
“It is indeed a step to attract investors such as venture capitalists as well as angel investors, to notice Malaysian-born startups’ high growth potential.
“Now our entrepreneurs who are seeking to raise further funds to support their business growth will no longer have to cross Malaysian shores just to seek investors,” said Nazrin.
The new partners
Each of the four new partners brings something unique to the Cradle table.
SMS Asia is interested in startups that can potentially disrupt the healthcare sector; East Ventures SEA 2, which has 70 investments under its portfolio, is keen on Internet and mobile-focused startups that can help solve problems in emerging markets; Qeerad Holdings, which has invested in four startups in Malaysia, is looking at mobile and Software-as-a-Service startups.
“This is also the first time Cradle is partnering with an investment group of angel investors,” Nazrin said, referring to MOC Capital.
“We look forward to this being the first of many future co-investment collaborations with angel investors,” he added.
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