MaGIC–Penjana Kapital collaboration offers seed stage startups better access to funding

• Unlock investment opportunities for innovative startups to scale regionally
• MaGIC kicks off two key programmes – Ace Your Pitch and Strike a Pitch

The Malaysian Global Innovation & Creativity Centre (MaGIC) and Penjana Kapital Sdn Bhd are collaborating to unlock potential investment opportunities for innovative startups, which in turn will position them to scale and grow regionally and beyond.

In bridging the funding gap faced by startups, MaGIC will funnel its alumni, in particular seed stage startups, to venture capitals (VCs) under the Dana Penjana Nasional (DPN) programme. For seed stage, the VCs include Tenggara Capital Partners - IMO Ventures and The Hive SouthEast Asia- Tuas Capital Partners.

The DPN, which is a matching fund-of-funds programme, is administered by Penjana Kapital. This programme, which is part of the Short-Term Economic Recovery Plan (PENJANA), 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 Government will match US$144.7 million (RM600 million), on a 1:1 basis, of the funds raised by the VC fund managers from foreign and private domestic investors, with a target allocation of RM1.2 billion. At its first close at end-May 2021, Penjana Kapital has raised US$205 million (RM850 million), with more than half from foreign investors in Hong Kong, South Korea and Singapore. The successful first close means that the programme is on track to meet the target of RM1.2 billion.

[RM1 = US$0.241]

MaGIC is one of the key ecosystem enablers in nurturing the growth of startups in Malaysia. The interventions that MaGIC offers revolve around capacity development, collaborative entrepreneurship, facilitating market and capital access to the startups. Since its commencement of operation in 2014, MaGIC’s programmes have impacted over 100,000 aspiring and seasoned entrepreneurs, 2,800 startups and created an economic value of RM2.1 billion.

By bridging the funding gap, MaGIC and Penjana Kapital aspires to reorient private capital for innovative startups, attract global and regional VCs into Malaysia, as well as elevate knowledge transfer, talent development and creation in the Malaysia ecosystem.

To meet these objectives, MaGIC has kicked off two key programmes – Ace Your Pitch and Strike a Pitch. 70 startups participated in Ace Your Pitch, which comprises a clinic session to support startups in enhancing their pitch presentation, which includes improving understanding of funding fundamentals, elevating their pitch deck and polishing their presentation skills.

In Strike a Pitch, 19 startups were shortlisted from 84 applicants to pitch to VCs Immersion Ventures-Tenggara Capital, The Hive Southeast Asia-Tuas Capital and Penjana Kapital. Eight out of the 19 startups will proceed to the next stage of VC assessment for further deliberation.

“Being a key enabler to the ecosystem, we are aware of the challenges faced by startups as we regularly engage with them. We have always stressed the importance of capacity building, and we are happy to identify startups with potential and funnel them to Penjana Kapital and its partner VCs. Funding has always been a key challenge for startups to scale up, and we seek to bridge this gap via the DPN,” said Amiruddin Abdul Shukor (pic), Acting Chief Executive Officer of MaGIC.

Taufiq Iskandar, Chief Investment Officer of Penjana Kapital, said the collaboration with MaGIC will boost DPN’s objectives to overcome innovation funding gap and accelerate Malaysia’s economic recovery whose momentum has been derailed by a more persistent Covid-19 pandemic.

“MaGIC’s experience in the startup ecosystem, in particular tech startups, will help us in our quest to streamline the digitalisation and automation of Malaysian businesses through innovation. We are aware that seed stage startups face some funding challenges, and in collaboration with MaGIC, we believe we can help them overcome these,” he said.