VC investments of RM1.57 bil expected to trickle down to M’sian ecosystem

PENJANA Kapital Sdn Bhd’s success in attracting eight foreign venture capital (VC) firms will result in a trickle-down effect that will grow and enhance the capabilities of local ecosystem and start-ups through knowledge transfer, as well as spurring network opportunities.

“The foreign VC’s commitment will also encourage private capital to support promising local start-ups and businesses, alleviating their challenges as a result of the pandemic,” Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz said.

Penjana Kapital has attracted eight foreign VC managers, namely from United States, South Korea, China, Indonesia and Singapore, and local partners to invest up to RM1.57 bil in Malaysian start-ups.

The amount is made up of RM600 mil from government matched up with 1:1 basis of RM600 mil commitment by the VC fund managers and potential investment of a further RM370 mil into companies that match their risk and investment profile.

“Knowing and understanding this process makes Penjana Kapital’s success in attracting these investors that much more commendable, particularly during these difficult times. And what these VCs usually invest in are new sectors, or new ways of managing existing industries, which is good for the long-term development of a knowledge-based economy,” he said.

Tengku Zafrul also said that among the key success factor of Penjana Kapital is that in selecting these VC fund managers, it implemented a rigorous evaluation process that was verified and validated by an external independent global consulting firm.

“They developed a highly structured programme which includes setting key financial performance benchmarks, as well as determining non-financial/strategic goals, like knowledge transfer requirements,” he added. – Dec 14, 2020

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