MaGIC Virtual GMP: The right partners can take you places
By Digital News Asia November 18, 2021
- Virtual Global Market-Fit Programme targeted at ambitious startups
- Facilitates networking and knowledge-sharing via partners and mentors
"Within a week of being in Thailand, MaGIC had connected StoreHub with the local startup network that accelerated our understanding of the market. Within six months of the visit, we were operational in Thailand."
That is the testimony of Wai Hong Fong, the Chieftain and cofounder of StoreHub, as he recounted how MaGIC had helped the POS and e-commerce provider venture into new markets.
This is all in line with MaGIC's mission is to strengthen the country's community of startups, investors and ecosystem players, all now done under the aegis of Malaysian Ministry of Science, Technology and Innovation (MOSTI), and executed through a combination of development programmes, funding opportunities and regulatory assistance.
"To date, we have impacted more than 100,000 entrepreneurs with an overall value creation of US$454 million (RM1.9 billion)," says Amiruddin Abdul Shukor (pic), MaGIC acting chief executive officer.
One of these initiatives is the Virtual Global Market-Fit Programme (GMP) which helps startups in the high-growth stage that are trying to expand beyond familiar borders. Literally, doing business beyond your own borders can be a foreign experience. "Therefore, Virtual GMP is a platform for startups to explore new ways of business and cultures before they spread their wings," says Amiruddin.
MaGIC assists startups by collaborating with partners both in Malaysia and abroad for networking opportunities, as well as providing an international mentor for two to three months who will hand-hold the companies during the expansion period.
Goal for 2021 is thirty companies to expand internationally
Amiruddin feels that startups participating in the programme will be handed a tremendous opportunity given that three previous Startups Exchange Programmes to Thailand, Indonesia, and Vietnam, achieved a 43% expansion success rate. "Even those who were not initially successful managed to gain key insights, and after that they adjusted their approach," he says.
Apart from StoreHub, who have now been operating in Thailand for four years, another success story is interior design company WeBuildEasy, who has spun off a subsidiary called PropEasy to take on the market in Vietnam.
The opportunity for this year is even sharper, given that the Covid-19 pandemic has derailed whatever plans companies had before. "GMP is a unique platform for them to thrive," says Amiruddin. MaGIC's goal for 2021 is to help at least 30 companies expand internationally, double of last year's targets despite the 100% virtual programme as international borders have yet to reopen.
Of the three cohorts this year, each exploring a different destination, Indonesia attracted 15 startups in April, China nine in July, and the most recent one for the United States attracted 10 startups. For a flavour of how such immersion cohorts impact participants, Amir Kamarudin’s experience is instructive. The head of business development for Far Capital Sdn Bhd learnt that expecting the Indonesian market to be similar to Malaysia’s is a recipe for failure. The business model had to be re-validated, as well as finding a product market fit. His learning curve was made slightly easier thanks to shared experiences by Malaysian companies that have already made it in Indonesia.
“I feel the most valuable component for us in the GMP Indonesia cohort was the Indonesian connections and partners that were curated based on my business needs. These are related companies, banks or investors that could be potential partners to ease our entry into Indonesia. We are very grateful that we have managed to successfully connect and partner up with some of them.”
Besides the effort that goes on to strategically match companies, a list of key verticals has also been drawn up. While some verticals are common across all three cohorts (ex e-commerce and agriculture), others have been identified based on the country’s particular strength. "For example, we think there are opportunities in the gaming sector in the US, and biotech for China," Amiruddin says.
Programmes take two to three months to complete, in which participants will be guided through several stages. After a pre-immersion to get a first understanding of the new market, there will be an immersion trip that serves as a data gathering exercise and includes meetings with potential customers and partners, accelerators and mentors. That in turn will lay the groundwork for a validation trip later.
"We are conducting 100% of these programmes online due to restrictions on international travels,” explains Amiruddin, adding that the situation is very much in flux, and dependent on government restrictions.
Partners and mentors
Partners play a key role in giving guidance, with an international mentor helping out for three months. "We want to offer network and insights to each market, including access to a wide range of investors and ecosystem players."
In Indonesia MaGIC has partnered with entrepreneurship ecosystem builder KUMPUL, which manages 70 hubs in 32 cities, while in China, the programme leverages TusStar's technology incubator network, with over 300 locations in more than 70 cities. In the United States, the partner is US Market Access Center (US MAC), a Silicon Valley tech accelerator which has partnered with Malaysian fund manager, Pixel Play Ventures, which is focused on investing in rapidly growing early-stage companies that fit its ethical venture-build philosophy.
A key new Malaysian partner is Matrade where GMP is now considered as “Export promotion” programmes under MATRADE which means GMP startups now have access to the Market Development Grant (MDG) once they register as a MATRADE member.
Amiruddin feels that these partnerships create mutual opportunities and benefits. "For partners, they get to build a reservoir of best practice go-to-market strategies, and gain an understanding of what foreign businesses want and need."
"Meanwhile, some mentors might want to continue and collaborate further with startups after they understand the potential the participants might hold."
Since that initial foray to Thailand, StoreHub now has a team of 325 people across Kuala Lumpur, Bangkok, Manila and Shanghai. Last year, they raised US$8.9 million in a Series A+ funding round - all earmarked for even further growth and expansion. And it started with a bit of MaGIC dust.
More information regarding GMP can be found here.