Malaysia’s state-backed startup investors far from fast and furious

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Hello reader,

Mark Zuckerberg’s “move fast and break things” motto is something of a mantra for a lot of folks in the startup space.

While the second half of the phrase is pretty controversial (I mean you can argue that Facebook broke democracy in more than a few countries), there’s still a lot to be said for the concept of moving fast.

After all, most startups are trying to build products that are either completely new concepts or take a fresh approach. So first-mover advantage is critical.

Governments and their surrounding bureaucracies are notoriously slow to make decisions, so how can startups hoping to win funding from institutional investors move fast?

Today’s featured premium story tackles that very subject in Malaysia, where there are big gaps between government policies to fund entrepreneurship and how those policies are put into practice.

Today we look at:

• More haste and more speed needed in Malaysian funding game
• Proptech firm Rently expands into Singapore’s commercial real estate sector
• Other newsy highlights such as funding for the NTU spin-off that’s trying to improve stroke treatment and TikTok facing scrutiny in the US, again.

Premium summary

The state of state funding for startups in Malaysia

Image credit: Timmy Loen

Malaysian Prime Minister Anwar Ibrahim has given the country’s government-linked investment companies (GLICs) a mandate to invest in startups and tech firms.

While GLICs are typically conservative investors, some of them have already been setting aside small sums for tech investments. However, significant gaps remain between funding policies and funding disbursement in practice.

• Everything is political: All the GLICs report to the prime minister and finance minister in one form or another, and their investment decisions are somewhat subject to the policies of the day. Affirmative action schemes dictate that they must concentrate their investments on local startups led by Malays, the country’s dominant ethnic group.
• Speed is of the essence: Despite these affirmative action policies, it’s tedious for startups to actually get their hands on funding. GLICs must submit their investment proposals to the Finance Ministry, a panel then scrutinizes the proposal before briefing the minister, who either approves the investment or pushes it back. Sources told Tech in Asia that this process can take months, and in some cases, it has led Malaysian startups to lose out on funding rounds.
• Leader of the pack: Sovereign wealth fund Khazanah Nasional can lay claim to the title of least risk-averse GLIC. It typically invests directly in mature startups and as limited partners in funds targeting early-stage firms. Its startup and tech investment vehicle Dana Impak has an allocation of over US$1.2 billion across five years, with the money coming from Khazanah’s books.

Rently plots new course

The rise of Malaysia’s tech ecosystem

Quick bytes