Khazanah: ‘All Malaysia’ approach for startups

“Everyone in all industries” must work hand-in-hand to crowd-in new investments and ensure inclusivity, says Amirul Feisal.

PETALING JAYA: Khazanah Nasional Bhd has called for an “all Malaysia” approach to support the local startup ecosystem, without solely depending on the government or its agencies.

The sovereign wealth fund also urged startups, in most instances, to eventually have a strategy to expand internationally as Malaysia is a “relatively small market in the regional context.”

As the country nears the 2025 deadline to achieve five homegrown unicorns, Khazanah managing director Datuk Amirul Feisal Wan Zahir said that “everyone in all industries” must work hand-in-hand to crowd-in new investments and ensure inclusivity.

In an interview with StarBiz, Amirul Feisal also highlighted the importance of large corporations collaborating with startups, given the large corporations’ greater resources as well as better insights into specific industry opportunities and challenges.

“This is the reason for our partnership with Plug and Play (P&P), a leading global innovation platform that connects startups, corporations, venture capital firms, universities and government agencies.

“The focus of the partnership is to set up a Malaysia-based corporate innovation and accelerator programme involving leading Malaysian corporates, with CelcomDigi as one of the anchor partners.

“As we speak, P&P is reaching out to and onboarding more anchor corporate partners. With easier access to ventures, Malaysian corporations can explore and match technology and ideas with their innovation needs,” he said.

On its part, Khazanah has come on board as a corporate partner for the PETRONAS FutureTech 3.0 technology accelerator programme, in order to foster collaboration between corporations and the technology-driven startup ecosystem.

The sovereign wealth fund also created the Future Malaysia Programme to fill the risk capital gaps in the country, where Khazanah had committed RM180mil to support the local startup ecosystem.

Amirul Feisal pointed out that Khazanah works with established venture capital (VC) managers to invest in startups, due to the different skill sets and organisation set-up required to support the portfolio companies.

By partnering with VC managers and ecosystem players with a proven track record, the right expertise and complementary strategic value propositions, Amirul Feisal said risks associated with early-stage venture capital investing can be mitigated.

This, in turn, would diversify the portfolio to lower overall risks.

In March this year, Khazanah announced its partnership with two VC funds – Gobi Partners and 500 Global. Both are among the most active VC managers with an extensive investing track record and expertise for value creation in Malaysia.

“We may follow-on through direct investments in late-stage companies once the business model has matured and meets our investment criteria and risk-return profile,” he added.

Another important aspect in building the ecosystem is by further nurturing and developing Malaysian technology talents.

“We launched the Future Malaysia Skills initiative, where our first venture is a joint venture with the Sunway Education Group to establish ‘42 Malaysia’, an innovative peer-to-peer computer science school that aims to accelerate the development of 10,000 skilled technology talents – regardless of education and socioeconomic background – in the next 10 years.

“It is important to generate a sustainable talent pipeline to complement our initiatives in the Future Malaysia Programme to support the local startup and corporate venture ecosystem,” he said.

Meanwhile, Amirul Feisal called on successful startups to have a regional strategy, which is often a key factor to successful fundraising during the scale-up and growth stages.

“To this end, our experience in investing overseas and the strong network and relationships that we have established allow us to encourage large enterprises to set up in Malaysia, potentially enriching the local ecosystem further,” he said.

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