3 Malaysian startups nab funding from 1337 Ventures

1337 Ventures ran a pre-accelerator bootcamp in Kuala Lumpur last month. Photo credit: 1337 Ventures.

Malaysia’s 1337 Ventures has invested in three local startups selected through its Alpha Startups pre-accelerator program, which provides funding and mentoring opportunities for “ideation-stage” concepts.

The three teams are ewallet provider Bayar, home-cooked food ordering and delivery platform Hometaste, and mobile locker laundry collection service Dobybox. Each will receive an investment of US$25,000, along with Amazon Web Services support and mentoring from the 1337 Ventures team.

Andy Sitt, founder of stock photo library 123RF, co-invested with 1337 Ventures in Hometaste. Bayar secured additional funding from angel investors at Seek Asia and Google Japan.

A total of 20 startups and entrepreneurs were accepted into the Alpha Startups bootcamp, which ran between April 17 and 21 in Kuala Lumpur. While a few participants already had prototypes in place, more than half were at ideation stage and yet to develop a minimum viable product (MVP). Eleven startups – including some of those without an MVP – were invited to present their business ideas to attending VC firms, angel investors, and corporates.

“With each batch, the level of applicants is significantly improving,” said Bikesh Lakhmichand, founding partner at 1337 Ventures, in a statement. “We’re seeing more domain experts attempting to launch products to significantly expand their businesses – from the likes of an accountant attempting to build a micro SME-focused tax and accounting system, to a launderette owner attempting to find new ways to scale his existing business.”

Scouting for promising teams

The Alpha Startups format is intended to give companies a platform to “test and validate” their ideas at an earlier stage than would be possible with typical accelerator programs.

“Investing into an early-stage startup in this way is more weighted towards the team, rather than the initial idea or business model,” Bikesh tells Tech In Asia. “These things can pivot, but people hardly change. The pre-accelerator allows the startup and their team to spend an entire week with us and our external mentors to see how a team comes together and solves the daily tasks put in front of them.”

This gives entrepreneurs an insight into what investors are on the lookout for at ideation stage. For prospective backers, the pre-accelerator can introduce some assurance into the process. “Startups get to understand what goes on in the mind of an investor and expectations are set in the beginning,” says Bikesh. “Investors have less of a stab in the dark when it comes to investing into early-stage teams.”

As for Bayar, Dobybox and Hometaste, all three ticked certain boxes that attracted 1337 Ventures and the other investors. “They were not building products first and then finding problems with them during the bootcamp,” Bikesh continues. “They were working in verticals that we were interested in. We saw so many fintech startups in Malaysia in our last batch, but Bayar is the first ewallet we’ve decided to invest into.”

Ultimately though, an idea’s chances of success at an Alpha Startups event are significantly improved if the team behind it can demonstrate it has what it takes to reach the next milestone. “We can safely say it’s the team members that it usually comes down to,” says Bikesh. “We’ve worked with so many founders in the past, and that has given us a cheat sheet in picking founders with those traits of perseverance.”

Alpha Startups’ next bootcamp will run between May 29 and June 4 and focus on game development. It will be held in partnership with Media Prima Labs, the digital arm of Malaysian media giant Media Prima, with support from government-owned Malaysia Digital Economy Corporation and telco Digi. Aspiring game developers are invited to apply by submitting a video application.