Startup agency raises RM14.35mil from partners this year, on top of last year’s RM14mil, and matching contributions make it a grand sum of RM56.7mil.
Early stage ecosystem influencer, Cradle Fund Sdn Bhd (Cradle), has raised its equity co-investment fund following the inclusion of five more partners.
The five equity partners – Captii Ventures Pte Ltd, Kathrein Ventures Pte Ltd, KK Fund, Start Up Nation Sdn Bhd and Mercatus Ventures Sdn Bhd – agreed to take part in a one-to-one equity co-investment exercise with Cradle, with each investing up to RM500,000 (around S$186,898).
These regional investors will bring the number of Cradle’s equity co-investment partners to nine. Other equity co-investment partners include Fatfish Ventures Sdn Bhd, OSK Ventures International Bhd, CoEnt Venture Partners Pte Ltd and Crystal Horse Investments Pte Ltd.
Cradle also sealed a grant co-investment deal with Singapore-based Golden Gate Ventures in June last year.
The new partners collectively bring in RM14.35mil into the co-investment partnership. In addition to the RM14mil raised last year from previous partners and a matching contribution from Cradle, a total of RM56.7mil has been raised to support Malaysian technology start-ups of high calibre.
Nazrin Hassan, Cradle chief executive officer, said the working relationship with the new partners would further give Malaysian technology start-ups an extra edge as they prepared to compete at a global level.
“We are elated to bring five new partners on-board. This co-investment partnership takes our relationships to a whole new level. Being seasoned investors, our new partners will also give us additional insights and experience in investing in start-ups which Cradle may not currently have,” he said.
Nazrin said Cradle’s expansion into co-investment was one of the steps to attract foreign investors, especially venture capitalists and angel groups, to invest in technology business deals in Malaysia.
“This will be an added advantage for our entrepreneurs who are seeking to raise further funds to support their business growth, as they will not have to venture across Malaysian shores to seek for investors. It is also hoped that with a larger pool of discerning foreign investors, our Malaysian entrepreneurs will be encouraged to be more global in their approach and market access,” he said.
Nazrin added that the co-investment partnership was also done in preparation for the gradual reduction of government grants towards supporting early stage start-ups.
“This is one way Cradle can continue to support highly talented technology entrepreneurs realise their dreams for success,” he said.
Nazrin said Cradle planned to channel 70% of its funding allocation to co-investing initiatives by 2017 and retain only 30% for direct grants. It aims to forge co-investment partnerships with 21 local and global investors.
In its 10-year history, Cradle has funded almost 700 Malaysian technology start-ups through its CIP Catalyst product development grant and its CIP500 product commercialisation grant.
Funded companies include taxi booking mobile application, MyTeksi, financial planning website, Intelligent Money, infographic design web tool, Piktochart and hypoglycaemic-shock alert bracelet, Hypoband. It also has a commercialisation rate of 58%, deemed to be the highest among all government grant agencies.