Malaysia to set up $627m fund for startups in Southeast Asia

Kuala Lumpur, Malaysia / Photo credit: 123rf

Malaysia’s sovereign wealth fund Khazanah Nasional, along with Blue Chip Venture Capital and local retirement fund KWAP, are setting up a venture capital fund. Worth up to 3 billion ringgit (US$627 million), the fund would target Southeast Asian startups, Bloomberg reported.

This move is part of Malaysia’s larger goal to become one of the top 20 global startup centers. The country aims to double VC investments to US$1.4 billion by 2030 and plans to invite 12 international VC firms to set up shop in Malaysia.

Malaysia is also offering subsidies for office rentals and visa waivers to global tech companies expanding to the country. Global semiconductor giant Arm Holdings and chemical firm OCI Holdings have already announced plans to invest in Malaysia.

Data from the Securities Commission Malaysia shows large growth in VC and private equity funds in Malaysia, rising from US$690.4 million in 2006 to US$3.68 billion in 2023.

According to KWAP CEO Nik Amlizan Mohamed, the pension fund plans to invest more in startups and VCs to increase its returns. This is part of Malaysia’s strategic move to attract more international capital to Southeast Asia while boosting the local startup sector and listings in Kuala Lumpur.

State-owned Malaysia Venture Capital Management – the country’s largest VC firm – recently said it would double its investments to US$1.4 billion as part of the company’s Malaysia Venture Capital Roadmap, backed by the country’s Ministry of Science, Technology, and Innovation.

Under this strategy, the company will up its efforts in funding, regulatory reform, and expanding capacity.

See also: Malaysia unveils VC roadmap, but where is it going?

Currency converted from Malaysian ringgit to US dollar: US$1 = 4.78 ringgit.