By Majella Gomes
Technopreneurs seeking loans should seek out Cradle Fund Sdn Bhd, a government agency under the Ministry of Finance (MoF) which has put in place several financing initiatives to spur the growth of the technology industry in Malaysia. These are the CIP Catalyst and CIP500, which are pre-seed and seed conditional grants; the Coach & Grow Programme (CGP) which offers one-on-one entrepreneurship coaching on key business fundamentals; tax breaks for angel investment called Angel Tax Incentives; and DEQ800, which is direct equity investment.
The three main areas to keep an eye on for tech growth are Artificial Intelligence (AI), video and mobile content and blockchain, said Adam Ramskay, Cradle Fund’s Marketing Manager at the recent MIA Government Grants and Financing for SMEs seminar 2017.
Cradle starts funding technoprises from pre-seed stage, to production of prototype or proof of concept, to production and commercialisation, new markets, and subsequent scaling and expansion. “DEQ800, which offers capital injection of up to RM800,000 for local early-stage tech start-ups, was recently launched,” said Adam. Beyond financing, Cradle Fund’s assistance offers CGP, a customised coaching programme that provides two dedicated coaches with entrepreneurial, investor or senior management experience to start-ups over a period of 12 months, to help them get their businesses into shape and their products to market. The start-up teams enrolled in CGP have so far generated RM49.4 million in revenue while the scaled-up businesses have generated RM1.24 billion.
Cradle Fund has also successfully rolled out its Cradle Investment Programme (CIP), under which it offered funds under CIP Catalyst and U-CIP Catalyst, and CIP500. Both these funds have now closed as monies have been fully disbursed but while they were operational, CIP Catalyst and U-CIP Catalyst each offered up to RM150,000 to teams of individuals which needed funding for prototype development. CIP500 was for start-ups to the amount of RM500,000, for funding of market access for their products and services.
An increasing number of traditional corporate funders were now beginning to take an interest in funding start-ups, meaning that the pool of funds has expanded. “At present, we have more than 30 co-investment partners whom we work with to channel funds to deserving enterprises,” said Adam, noting that interest in non-traditional business sectors was gaining traction. Some stellar successes include Grab Taxi and Carlist.my. Grab Taxi received a grant from Yayasan Rakyat Malaysia, and subsequently raised funds successfully from five different groups of investors. Carlist, on the other hand, was established with venture capitalist funds, was subsequently acquired by the Catcha Group and was listed on the Australian Stock Exchange in September 2012.