Monday, December 9

Cradle’s private investment fund grows to RM190.2 mln

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KUALA LUMPUR: Cradle Fund Sdn Bhd (Cradle) is on track to drive more private investment participation to boost the ecosystem for Malaysian technology startups with co-investment funds of RM190.2 million, up from RM161.2 million as of June this year.

Chief executive officer, Nazrin Hassan, said the co-investment programme was one of the company’s efforts to help reduce government-linked companies’ dependence on government funding.

“Since the inception of the co-investment programme in 2014, four companies have benefited in getting funding through this initiative with total investments of RM6.08 million,” he said at a signing ceremony with six more co-investment partners yesterday.

Under this programme, Cradle will channel 50 per cent of its funding allocation to co-investing initiatives and the remaining via direct grant by 2017 and further reduced the allocation to 70:30 by 2018, said Nazrin. Cradle yesterday signed partnership agreements with RHL Ventures, TinkBig Venture, Biz Angel Network, EIX Group, Segnel Ventures and PlatCom Ventures, which will take part to fund Malaysian startups totalling RM14.5 million.

With the new partners on board, the number of partners has grown to 32 with total committed funds of RM190.2 million.

Nazrin said investment activities had been slow this year, with the apparent slowdown in regional investments which in turn affected investments into Malaysian startups as investors were being cautious.

With the slowdown, he said Cradle had been focusing on trying to dissect the problems and exploring ways to encourage investment in startups to help spur  the ecosystem which included having diversity in the co-investment circle from venture capitalists, institutional investors and equity crowd funding (ECF) platform operators.

The introduction of alternative platforms for startups to raise funding such as ECF and peer to peer lending, as well as more active angel funding came at the right time and helped to reduce the impact, he said.

He said having partners with diverse backgrounds gave Cradle the edge and huge opportunity to learn and tap on their experience to provide additional insights in investing in startups.

Nazrin said from next year, Cradle would also be introducing direct equity investments as a step further from its current role of co-investor.

“This is one of the ways to explore other solutions to encourage investments in Malaysian startups.

“Not only will it give us the opportunity to follow the co-investment deals, but we will also directly lead the round of funding,” he said. — Bernama