Korea GPs back $281m Malaysia VC fund
Korea’s SK Group, Hanwha Asset Management, and KB Investment have contributed to a MRY1.2 billion ($281 million) VC fund launched by the Malaysian government.
Hong Kong’s Provident Growth and US-based early-stage investors 500 Startups and The Hive also participated. International and domestic investors are expected to provide 50% of the target corpus, with the Malaysian government providing the remainder.
The vehicle, known as Penjana Nasional Fund, is part of a MYR35 billion economic stimulus package aimed at stemming the economic hardships of COVID-19 through wage subsidies, unemployment mitigation initiatives, and various business incentives. This effort includes a strong focus on digitization and adjusting the business sector to new operational realities through support for the innovation ecosystem.
The government will also allocate MYR100 million to the establishment of a National Technology and Innovation Sandbox, which will be spearheaded by the Ministry of Science, Technology and Innovation, Prime Minister Muhyiddin Yassin said in a speech. The sandbox will provide a relaxed regulatory environment for testing new technologies, including drones and autonomous vehicles as e-commerce logistics tools.
Last month, the Ministry of Science separately announced a MYR100 million initiative that would facilitate low-interest loans from government-owned Malaysia Debt Ventures to established start-ups. There are also plans to facilitate grants from the government-connected Cradle accelerator and to allocate MYR10 million to a similar agency called the Malaysian Global Innovation and Creativity Centre, or MaGIC.
Malaysia’s struggle to contain the economic impact of COVID-19 is seen as especially pressing in light of a pre-existing slowdown and a sense of political instability, itself connected to an investment industry scandal. Recent private sector efforts to support the business sector include COPE Private Equity launching an MYR180 million program called Bridge Over Troubled Water, which targets established, shariah-compliant companies.
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