MDV to complement Dana Penjana Nasional investments to boost Malaysian startup growth

• Investments by new venture debt firms a chance for club/syndicated deals
• MDV well positioned to continue as catalyst for venture debt growth

Malaysia Debt Ventures Bhd (MDV), a subsidiary of the Minister of Finance (Incorporated) [MOF Inc] and dedicated technology financier, issued a statement applauding the announcement by Penjana Kapital on the selection of eight venture capital (VC) fund managers that will invest in Malaysian startups as part of the Dana Penjana Nasional programme.

With a combined indicative fund size of US$388 million (RM1.57 billion) under the programme, MDV expressed optimism that the fund will revitalise the startup sector and drive the country’s economic recovery through the growth of technology and innovative companies.

From MDV's perspective, the new investments from Penjana Kapital’s VC partners will boost the growth of technology startups with MDV ready to assist these startups further via its Venture Financing programme as a complementary source of capital to ensure the maximisation of returns for their businesses.

Currently, MDV is the only financial institution in Malaysia offering Shariah-compliant Venture Debt via its Venture Financing programme that was first introduced in 2018. Through this programme, MDV has pioneered and steered the growth of the venture debt market in Malaysia.

However, MDV recognises the importance of synergy and collaborations with other funders within the ecosystem to provide a holistic and complete financing solution for startups. Through the Dana Penjana programme, potential investments by new venture debt firms will provide opportunity for MDV to embark on club or syndicated deals.

According to MDV’s Chairman, Khairul Azwan Harun (pic): “As venture capital and private equity funds typically invest solely in the equity securities of their portfolio companies, we believe that our debt investments will be viewed as an attractive and complementary source of capital, both by the portfolio company and by the portfolio company’s financial sponsor. In addition, we believe that many venture capital and private equity fund sponsors encourage their portfolio companies to use debt financing for a portion of their capital needs as a means of potentially enhancing equity returns, minimising equity dilution and increasing valuations prior to a subsequent equity financing round or a liquidity event.”

MDV believes that with the Government’s continued commitment in supporting and enhancing the startup ecosystem in Malaysia, as a dedicated technology financier in Malaysia, it is well-positioned to continue being the catalyst for growth of venture debt as a funding alternative for high-growth technology startups in Malaysia.