Dana Penjana Nasional raises US$206mil in first close

• Around half of amount raised is from foreign investors, including HK, Korea, Singapore
• A portion raised already approved for investment in nine startups

DANA Penjana Nasional (DPN), a matching funds-of-funds programme under the Malaysian Short-Term Economic Recovery Plan (Penjana), has raised US$206 million (RM850 million) for its first close dated May 2021.

[RM1 = US$0.242]

In a statement, Penjana Kapital Sdn Bhd – the company set up to operationalise DPN – said that the funding exceeded its target of RM228 million by RM622 million.

Penjana Kapital said 55% of the total amount raised (RM433 million) was from foreign investors from Hong Kong, Singapore and South Korea.

Additionally, out of the eight approved foreign venture capital (VC) fund managers and their Malaysian partners selected as part of the DPN programme, three has successfully reached their final close target ahead of the deadline.

"The government of Malaysia will match RM600 million, on a 1:1 basis, of the funds raised by the venture capital (VC) fund managers from foreign and private domestic investors, with a target allocation of RM1.2 billion,” said Penjana Kapital.

"The successful first close means that the programme is likely to meet the target of RM1.2 billion.”

According to Penjana Kapital, the DPN is aimed at bridging the funding gap in the country by incentivising private capital to facilitate the growth of startups and create an enabling environment for these startups to scale and expand their reach internationally.

The fund serves not just as a vehicle to attract foreign capital to Malaysia, but as a “crucial lifeline” for local startups, it added.

“DPN’s objective is underscored by the need to ensure that the Malaysian start-up space can overcome their Covid-19-related funding challenges, and continue innovating to contribute to the nation’s advancement in various sectors, including mobility, agriculture and healthcare,” said Tengku Zafrul Aziz, Malaysia’s minister of finance.

“The projects that have been selected are developing solutions premised on innovative, cutting-edge technology, all of which could help Malaysia make that quantum leap towards its MyDigital vision much quicker than expected.”

The investments

Pejana Kapital said RM118 million of the total raised has been approved for investment in nine startups. This includes an home-grown mobility startup that has an unnamed global automotive giant as an investor, and is expected to create approximately 1,000 jobs in Malaysia.

This is expected to position the company as a potential Malaysian unicorn, Penjana Kapital added.

DPN has approved a fintech startup with “an innovative business model” that will be relocating its headquarters to Malaysia from Singapore post-investment.

This will create high quality employment and attract talent to Malaysia for knowledge transfer, said Pejana Kapital.

There are two more highlighted startups, one of them being a pre-unicorn fintech company, which Pejanan Kapital described as serving multinational companies across Asia that “is committed to investing up to US$100 million in Malaysia over the next five years post-investment.”

The company’s expansion in Malaysia is expected to bring high value knowledge transfer from its Silicon Valley trained team and create job opportunities for Malaysians in the fintech industry.

The last company highlighted is an agritech food company that is exploring Malaysian investments ranging from US$15 million to US$75 million, said Pejana Kapital.

It said the portfolio of startups is committed to deliver tangible economic benefits to the Malaysian economy and create at least 1,400 high quality jobs in the process.

“DPN's matching investment programme is not only attracting private capital, but also ensuring risk diversification benefits to the portfolio,” said Tengku Zafrul.

The amount of funds to be invested from the programme of at least RM1.2 billion over two years is sizable relative to the total committed VC funds under management in Malaysia of around RM4.4 billion as at end-2020, said Pejana Kapital.

This sizeable injection of funding is expected to catalyse the local VC ecosystem and positively impact the local start-up space, it added.