KUALA LUMPUR: Cradle Fund Sdn Bhd, an agency under the Finance Ministry, has teamed up with MyEG Services Bhd to invest in a RM60mil fund to provide venture capital to early stage start-ups.
The companies signed a memorandum of understanding (MoU) yesterday with Cradle Fund investing RM40mil and MyEG RM20mil to set up Cradle Seed Ventures Fund 1 (CF1).
Cradle Fund, which promotes early stage funding, will incorporate a private limited company, Cradle Seed Ventures (CSV) with the e-Government services provider to mine for deals and select the recipients of CF1.
CSV is expected to take applications from late December this year or early January next year and is expected to invest in about 20 start-ups in the next four to five years.
Cradle Fund’s commercialisation and ventures vice president Johnathan Lee said: “We don’t just expect start-ups to knock on our doors to apply for funds. We also mine for potential deals as most of those who knocked on our doors who needed the funds previously, lacked planning,” he told StarBiz.
Cradle has also been managing the RM100mil Cradle Investment Programme since its inception in 2003.
“With this fund, we can provide an alternative to local technology start-ups and stem the outflow of early stage deals to Singapore,” Cradle Fund group chief executive officer Nazrin Hassan said in his speech at the signing ceremony yesterday.
The fund is expected to disburse between RM1mil to RM3mil per start-up that is technology and innovation driven. They include start-ups in the areas promoted by the National Key Economic Areas (NKEAS).
Some of the key areas include financial services, education, healthcare, oil and gas and energy.
Nazrin said 70% of the fund would be invested in local companies with the remainder for overseas start-ups.
“This will bring talent and technology back to Malaysia, strengthening the nation’s pool of knowledge workers and advancing innovation in South-East Asia,” he said. MyEG executive chairman Datuk Dr Norraesah Mohamad hoped the fund would provide an additional avenue for it to compete effectively with its regional counterparts.