Malaysia's Khazanah launches start-up programme

It extends a raft of Malaysian government activity aimed at stimulating the technology and innovation economy in partnership with the VC industry. In January AC Ventures and Indies Capital joined a tech investment programme led by government VC unit Penjana Kapital.

Khazanah’s latest venture, the Future Malaysia Programme, is part of Dana Impak, a MYR 6bn initiative launched in 2021 as part of a COVID-19 recovery effort. Dana Impak’s agenda also included digital connectivity progress such as achieving full 4G and broadband coverage.

Future Malaysia aims to support the local start-up ecosystem, including corporate and independent VC firms, through investment and collaboration with domestic and international partners.

Initial progress includes partnerships with Gobi Partners, 500 Global, and Plug & Play. The idea is that international VC firms can help local start-ups become regional champions.

“Impact is part of the venture capital DNA. Many of the megatrends that 500 Global is investing in today – financial inclusion, digitalisation, access to healthcare and education, and sustainable cities – are aligned with Dana Impak’s key themes,” Khailee Ng, a managing partner of 500 Global, said in a statement.

The Plug & Play partnership will set up a corporate innovation and accelerator programme involving leading Malaysian corporates. CelcomDigi, the country’s largest wireless carrier, has signed up as an anchor partner and will be driving the initiative. CelcomDigi is backed by communications infrastructure provider Axiata Group, a Khazanah portfolio company.

Khazanah also identified Malaysian oil giant Petronas as a corporate partner. In February, Petronas’ FutureTech accelerator opened up to start-ups across Asia Pacific, its first attempt to reach beyond Malaysia. Petronas’ corporate VC unit invests globally and maintains an office in the US.

Khazanah was established in 1993 and is owned by the Ministry of Finance. It claimed net assets of about MYR 86bn as of March 2022. In 2018, its entire board of directors resigned amidst anti-corruption efforts coinciding with a change of government.

Malaysia’s VC space has historically suffered from a sense that the government is an over-pervasive presence, discouraging more activity by homegrown funds and regional investors.

The government’s main lever in this space is Mavcap, a wing of the Ministry of Science set up in 2001 that typically launches funds that dwarf those of independent operators in the country. Mavcap has historically launched and anchored funds with Gobi, 500, and Axiata.

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• Topics
• Southeast Asia
• Technology
• Fundraising
• Investments
• Early-stage
• Malaysia
• Khazanah Nasional
• Gobi Partners
• 500 Startups
• Sovereign wealth fund
• corporate venture capital