Penjana investments in start-ups an innovative attempt, says agency

PENJANA Kapital’s selection of eight venture capitals (VC) fund managers to invest in Malaysian start-ups would help rejuvenate businesses and boost the economy.

“The selection of eight VCs to invest in start-ups, under the Dana Penjana Nasional Programme, is definitely a good move.

“With a combined indicative fund worth RM1.57 bil, we are optimistic the fund will revitalise local start-ups and drive the country’s economic recovery through the growth of technology and innovative companies,” said Malaysia Debt Ventures Bhd (MDV) chairman Khairul Azwan Harun, in a statement.

On new investments, Khairul said that MDV is ready to assist start-ups further via its Venture Financing programme as a complementary source of capital to ensure maximum returns from their businesses.

He added that MDV is the only financial institution in Malaysia offering Shariah-compliant Venture Debt models, which was introduced in 2018.

“Through this programme, MDV has pioneered and steered the growth of the venture debt market in Malaysia.

“To achieve this, MDV recognises the importance of synergy and collaborations with other funders within the ecosystem to provide a holistic and complete financing solution for start-ups.

“Through the Dana Penjana programme, potential investments by new venture debt firms will provide opportunity for MDV to embark on club or syndicated deals,” said Khairul.

He added that MDV’s debt investments will be viewed as an attractive and complementary source of capital, both by the portfolio company and the company’s financial sponsor.

“In addition, many venture capital and private equity fund sponsors encourage their portfolio companies to use debt financing for a portion of their capital needs.

“It becomes an avenue to potentially enhance equity returns, minimising equity dilution and increase valuations prior to a subsequent equity financing round or a liquidity event,” Khairul added. – Dec 15, 2020.

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