KUALA LUMPUR: The Malaysia Automotive, Robotics and IoT Institute (MARii) is targeting up to RM200mil in investment commitments from venture capitalists by early 2022 for potential start-ups and small and medium-sized enterprises (SMEs).
MARii chief executive officer Datuk Madani Sahari said many start-ups and SMEs faced difficulties in securing funding because they did not have the track record to justify it.
“While many of these companies may have the capabilities or even the technology know-how, securing a loan in the conventional sense is often difficult, ” he told StarBiz.
Madani said when these companies approached banks, they would first need to supply audited information to the financial institutions before qualifying for loans.
“Most of the time, they don’t have the relevant track record to apply for loans because many banks require three years worth of audit. A company can only be audited after the first year.
“So many of these start-ups or SMEs are in a dilemma because they don’t have enough documentation to support their loan application. That’s why venture capital funding would make perfect sense.”
Earlier this month, MARii and Ficus Venture Capital (FVC) signed a memorandum of understanding (MoU) to develop funding opportunities for start-ups and SMEs.
The MoU will see both parties working closely on the development of a venture funding network for technology related businesses, create greater market access for local technology companies, provide thought leadership and guidance for SMEs, as well as the development of technology and intellectual property commercialisation funding.
“We are encouraging companies that develop technologies that is in line with the scope that MARii is undertaking currently, namely robotics and Internet of Things (IoT), ” said Madani.
“The application of robotics and IoT is not only into automotive. It also cuts across all sectors. So we do need new solutions and technologies being developed by start-up companies and this is where the venture capital aspect of it will come in to help fund such technologies, ” he added.
An initial commitment of RM30mil has been secured for the initiative from various investing parties, said Madani, adding that the MoU allows for the funding to be expanded up to RM200mil.
“We already have 50 companies in our database, so this year we’re planning to add another 30 for the remainder of 2020. The RM30mil is more than enough to fund the initial companies.
“We will grow that investment to RM100mil by the middle of next year and reach RM200mil by the beginning of RM2022, ” Madani said.
He added that the tie-up with FVC is timely, considering the impact that the Covid-19 pandemic has had on businesses everywhere.
“To have a quick recovery, we require technology and digitalisation is important. So part of the technology in IoT and robotics that we want to develop is digitalisation. Now is the time that we need to develop these solutions and technology.
“MARii will evaluate the technology and decide which company one we will want to fund. We can assure you already that the technology will be commercialised, because there are already recipients to receive the technology, ” he said.