Cradle Fund group chief executive officer Norman Matthieu Vanhaecke.
PETALING JAYA: With only about one in six startup grant applications approved each year, Cradle Fund Sdn Bhd says greater private-sector and corporate involvement is critical to closing Malaysia’s early-stage funding gap and accelerating startup growth.
Cradle group chief executive officer Norman Matthieu Vanhaecke said the agency receives between 500 and 600 applications annually for its early-stage grants, but approvals are at about 100 due to fixed annual allocations.
He added the programmes are governed by a robust review process. “It has ensured that every ringgit disbursed generates meaningful return to the country,” Vanhaecke said.
Operating under the Science, Technology and Innovation Ministry or Mosti, Cradle is a focal-point agency for Malaysia’s early-stage startups.
It provides two early-stage grants – CIP Spark, which supports prototype development with funding of up to RM150,000, and CIP Sprint, which offers up to RM600,000 to support early commercialisation efforts.
Vanhaecke said while Malaysia also has alternative early-stage funding avenues such as angel investments, equity crowdfunding (ECF) and peer-to-peer (P2P) financing, these channels on their own may not be sufficient to meet the needs of a growing startup pipeline.
“It is crucial to have other alternative sources of early-stage funding, such as angel investments, ECF and P2P. However, this may not be sufficient,” he noted.
He said stronger involvement from private corporates – including government-linked companies (GLCs) – at the early stage could play a significant role in accelerating innovation and growth.
To encourage that, the government introduced the Bengkel Inovasi GLC (BIG) programme in 2025, which is executed by Cradle and aims to catalyse corporate innovation by enabling GLCs to work with startups to solve problem statements or develop new innovations.
Vanhaecke said early-stage startups faced the highest level of risk, and government funding support through initiatives such as CIP Spark and CIP Sprint is intended to mitigate those risks during product development and early commercialisation.
He noted that private investor participation at the early stage has been encouraging, supported by angel investment groups that provide both funding access and investment support.
“To-date, there are over 300 registered angel investors nationwide. The government is also encouraging this via Angel Tax Incentive that provides tax exemption for investments up to RM500,000 per annum,” he added.
To further enrich the early-stage startup funding ecosystem, Vanhaecke said corporate involvement remains a key focus area for Cradle. In addition to BIG, the agency launched the Cradle Innovation Advisory programme in July 2025 to strengthen post-grant support for startups, improve commercialisation pathways, enhance linkages between corporates and startups, and encourage greater small and medium enterprises or SMEs and corporate-led innovation activities.
On environmental, social and governance (ESG)-related startup funding, Vanhaecke said governance, integrity and a focus on outcomes – rather than short-term deliverables – are key to ensuring long-term impact.
He pointed out several ESG-related startups funded under Cradle’s grant programme include MyTeksi (now Grab), iPay88 and StoreHub, which have contributed to job creation, safer digital payment adoption and the digitalisation of retail businesses.
“At Cradle, we believe technology advancements must never be to the detriment of our rich and diverse environmental resource and social well-being,” he added.
“As we strive to shape and nurture future generations of startups, Cradle places a very strong focus on highlighting that innovations and rapid growth could be achievable while being environmentally sustainable and socially impactful.”
Beyond funding, Vanhaecke said startups also required mentorship, workshops and facilitation support to better navigate markets locally, regionally and globally.
Non-funding support also allow startups to test solutions, learn from experience and pivot quickly in response to changing market conditions, he said.
At the national and regional level, Cradle is leading several initiatives including the Malaysia Startup Ecosystem Roadmap (SUPER) 2021-2030, MYStartup Single Window and the Startup Asean initiative.
These efforts aim to create 5,000 startups by 2025 and position Malaysia among the world’s top startup ecosystems by 2030.
At the regional level, Vanhaecke said the Asean Startup Initiative, led by Cradle, is aimed at fostering a more coordinated startup ecosystem through closer collaboration among founders, investors and ecosystem players across Asean member states.
He said Asean countries differ significantly in their policies, market conditions and approaches to early-stage funding.
“Some Asean countries have lesser government support at the early stage, and startups there would have to depend more on their own resources or private investor backing. However, startups in those countries tend to have a much larger market allowing them to grow quicker and attract larger venture capital injections at growth stage,” he said.
Vanhaecke said this imbalance underscored the importance of regional collaboration, particularly through platforms such as Startup Asean, which was launched in June 2025 as a central digital gateway for South-East Asia’s startup ecosystem.
He added that bringing together ecosystem stakeholders and decision-makers through regional platforms and forums, such as the Startup Asean Summit 2025, can help shape future policies and initiatives.
“By having all the key ecosystem stakeholders, decision and change-makers in the summit to discuss issues and drive formulation of future policies and initiatives can help promising Asean startups to scale their ideas and businesses whilst still maintaining sustainability and impact.
“Proximity and relevance of solutions for regional markets could greatly expand our startups’ reach to a far larger 700 million population market,” he said.
As an example, he highlighted Grab’s rapid regional expansion from Malaysia to Singapore and beyond, which allowed it to surpass Uber and become South-East Asia’s first decacorn.
