PETALING JAYA: The Dana Penjana Nasional (DPN) programme through Penjana Kapital Sdn Bhd will be the boost for Malaysian startups at the time of the new normal, says Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz.
“It was introduced as part of the government’s economic stimulus package to weather the impact of the Covid-19 pandemic, ” he said in his speech at the Penjana Kapital letter of award handover ceremony yesterday.
Penjana Kapital yesterday saw its first key milestone in connecting Malaysian startups with international venture capital (VC) companies, of which Tengku Zafrul said would help facilitate a growth path and a vibrant ecosystem for high-potential firms to thrive in.
Penjana Kapital said in a statement that it had attracted eight VC fund managers from the United States, South Korea, China, Indonesia and Singapore to invest in Malaysian startups as part of the RM1.2bil DPN programme.
DPN is a matching fund-of-fund programme, which is part of the short-term economic recovery plan (Penjana) that was launched by the government earlier in June 2020.
The government will match up to RM600mil, on a one-to-one basis, for funds raised by the VC fund managers from foreign and private local investors, with a target allocation of RM1.2bil.
The government said the selected VC fund managers have indicated additional investments to achieve a maximum fund size of RM1.57bil, or RM370mil above the original allocation of RM1.2bil.
“These eight VCs were carefully selected among the 51 applicants from around the world, including the US, China, Indonesia and Singapore, ” Tengku Zafrul said.
“To ensure compatibility with domestic players, a rigorous evaluation process was employed, and we are happy to say that the set-up is ready to achieve our objectives, and more, ” he added.
These funds will be deployed primarily in Malaysian start-ups, with the balance going into Asian investee companies that can bring tangible economic benefits to the Malaysian economy, Penjana Kapital said.
The successful VC fund managers are expected to bring with them deep knowledge in key sectors that have seen accelerated digitalisation in the post-Covid-19 era, it said.
“The target core sectors include fintech, edutech, agritech, mobility and artificial intelligence, ” Penjana Kapital said.
He said set-ups such as Penjana Kapital help to empower Malaysian start-ups, through knowledge transfer, as well as exponential growth through the ensuing network effect.
“It goes beyond providing the short-term funding needs of these companies. For the long term, Penjana Kapital has established Knowledge Transfer Plans (KTPs), to set a clear goal for the players involved, ” Tengku Zafrul said.
These KTPs (of which 91 are under Penjana Kapital alone) are expected to lead to the creation of at least 1,800 high-skilled jobs, through investee companies’ projects or knowledge transfers, he said.
This is in line with Malaysia’s objective of becoming a knowledge-based economy with high value-added products and services, he added.
The eight VC fund managers and their local partners selected after a rigorous evaluation and due diligence process by Penjana Kapital’s investment panel are seed stage companies Immersion Ventures Inc (IMO Ventures)/Tenggara Capital Sdn Bhd and The Hive Southeast Asia/Tuas Capital Partners Sdn Bhd.
VCs in the Series A & B funding stage are KB Investment Co, Ltd/RHL Ventures Sdn Bhd and AC Ventures/Translink Capital LLC/Vertex Force Sdn Bhd.
Growth funding stage VCs are Emissary Capital Sdn Bhd/SB Kaikaku Fund and CMIA Capital Partners/Bintang Capital Partners Bhd.
Venture debt funding stage companies are Hanwha Asset Management Co Ltd/KAF Investment Bank and Crewstone International Sdn Bhd/Bradbury Group.
“To everyone who has been selected under the DPN, I would like to welcome you on board this initiative, and I am confident you will fulfil the mandated roles. Our sincere appreciation for your trust and confidence in Malaysia, and I wish you all a great journey ahead, ” Tengku Zafrul said.
The request for proposal (RFP) exercise was conducted recently in September and 51 applications were received from various VC fund managers that are located in Malaysia and other parts of the world, it said.
Penjana Kapital said that among the key requirements that have been set to selected VC fund managers are the need to achieve financial performance benchmarks as well as knowledge transfer plans to benefit the local VC ecosystem.
“The knowledge transfer plan is expected to benefit and develop talent within the VC fund manager industry, the start-up companies as well as the general public as a whole, ” it said.
“Moving forward, I am optimistic to see more foreign and domestic investor participation, and I give my personal assurance that the government will continue to support high-impact investments for the nation, ” Tengku Zafrul said.
Tengku Zafrul also said the government had reached a new milestone in aligning – for the first time ever – many of its national budget measures with the 17 UN Sustainable Development Goals.
“As part of Budget 2021, we are proud to strengthen our sustainability agenda, including the RM2bil Green Technology Financing Scheme 3.0 to encourage the issuance of Sustainable and Responsible Investments (SRI) sukuk, and a tentative plan to issue our first sustainability bond next year, ” he said.
“We are also committed to ensuring the sustainability and continuity of our SMEs and micro enterprises during this Covid-19 episode, with aid amounting to RM24bil for over 1.4 million businesses, ” he added.
Among the aid packages are the SME Soft Loans Funds and the Wage Subsidy Programme as well as the Prihatin Special Grant, he said.