KUALA LUMPUR: Axiata Digital Innovation Fund (ADIF) has announced investments in the first batch of six technology companies totalling RM12.5mil.
The Malaysian-owned companies were involved in travel, services, education, logistics and media industries.
They are Maideasy, Tripfez, Easyparcel, Easyuni, SPOT News and Supahands, which will be funded over a period of 12 to 18 months.
The investment will assist them to expand their business and product reach into the regional digital services marketplace.
ADIF was a collaboration between Axiata Group Bhd and Malaysia Venture Capital Management Bhd (Mavcap) in 2014. It is managed by Intres Capital Partners, a subsidiary of Mavcap.
“The region is opening up, enabling people to transact and trade.
“Hence, ADIF provides the funding for venture capital, to facilitate trade and transactions, be it comparison engines, automisation of services, or core services,” said Kamarul Nizam Kassim who is partner of Intres Capital.
The total fund was proposed at RM100mil, of which Axiata and Mavcap have pledged RM50mil and RM20mil respectively.
Axiata group chief corporate officer Mohamad Idham Nawawi said that Axiata is on the lookout for potential partners to pledge the remaining RM30mil, which could be from corporations, financial entities or companies that want to monitor the Malaysian digital space.
It would also be an opportunity for corporations to build their own internal strategy, as they would have the benefit of knowing the latest development in the Malaysian digital space.
The stake size held by ADIF in these companies is like other venture capital investments, which can be between 20% and 40%.
Meanwhile, the exit strategy would depend on the progress made by the companies.
“One exit strategy would be to build the company to a certain size whereby they can actually go for a public listing in say five years.
Another alternative would be via trade sale.
“The trade sale could be to any interested parties. The last option would be through potential redemption by the founders themselves,” said Kamarul.
Companies are chosen by an investment committee that is made up of fund managers and representatives from Axiata.
It is a transparent process whereby the owners of the companies will present their business plans.
The committee will look at the scalability of the business, individuals running the business and if the company is poised for global market potential.