KUALA LUMPUR: Cradle Fund Sdn Bhd, which has RM28 million fund, will invest in three to 10 promising Malaysian technology start-ups in the next two years, said chief executive officer Nazrin Hassan.
Of the RM28 million, RM16.5 million were from five co-investment partners and RM11.5 were from Cradle Fund, he said.
Cradle Fund yesterday signed co-investing agreements with four new Singaporean companies – Fatfish Ventures Sdn Bhd, OSK Ventures International Bhd, CoEnt Venture Partners Pte Ltd and Crystal Horse Investments Pte Ltd.
The first agreement was signed in June this year with Golden Gate Ventures, which is now in the process of securing some co-investment deals.
Nazrin said the agreements would not only benefit the start-ups from getting possibly a larger amount of combined funding, but they would also receive more combined value-add, coming from both the private parties and Cradle.
“Given that we got our total allocation of RM30 million for next year, together with the amount of fund that we collected via the co-investment partners, we would be able to fund more local technology start-ups and to gradually reduce the dependence on government funding,” he told a media briefing after the co-investment announcement here yesterday.
The four co-investment agreements signed were in the form of equity investment, which Cradle had received the nod from the Ministry of Finance a few months ago.
It is in line with the company’s target of channeling 70 per cent of its funding allocation in the form of equity co-investment with the remaining 30 per cent in the form of direct grants.
“It is very much aligned to the government’s intent to reduce the dependence on grants and to move to more private-sector driven market instruments, like equity or debt instruments,” he said.
Nazrin said the company hoped to have at least 20 to 30 new partners by 2017.
He said as the company received a steady demand in terms of applications per month, ranging between 30 and 80 on both of its products, it has to enlarge the pool of its co-investment partners to benefit the clients.
Lau Kin Wai, chief executive officer of one of the co-investing partners, Fatfish Ventures, said the company hoped to achieve between 10 and 20 per cent return on investment as soon as it got a company to invest in.
Another partner, Patrick Yee, chief operating officer/executive director of OSK Ventures International, said the partnership would enable the budding entrepreneurs to obtain funding and create companies that spurred the growth for the country.
Cradle Fund has since 2003 disbursed about RM180 million to some local companies including MyTeksi and Intelligent Money, and it has the highest commercialisation rate at 59 per cent.
Cradle Fund, an agency under the Ministry of Finance, runs two programmes – Investment Programme for funding development and commercialisation of technological ideas and companies and the Coach and Grow Programme, which is a market-driven programme to train entrepreneurs.
— Bernama