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About MDEC and Cradle Fund Malaysian unicorn plan – Wired PR Lifestyle Story

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Over the past decade, players in the Malaysian startup ecosystem have been wondering: when will we get our first. Malaysian-based unicorn?

Then, in 2021, there was a sudden change and we found ourselves in the home of 3 unicorns, viz. Carsome, AirAsia Digital, and edotco Group.

But does that really mean Malaysia is ready to grow more unicorns? From the answers we have seen MyDIGITAL plan, there is still great skepticism about whether our government agencies can actually meet the stated goals.

For a brief presentation, some of MyDIGITAL’s goals are to create a new 5K business, grow or attract 5 unicorns, and digitize 875K SMEs and SMEs by 2030.

at a round table Wild Digital SEA 2021We had the pleasure of hearing from Gopi Ganesalingam, Chief Digital Industry Officer Malaysia Digital Economy Corporation (MDEC), and Rafiza Ghazali, general manager of the group Cradle Fund Explain the goals of MyDIGITAL in more depth and answer various questions from the startup community.

Session Dash Dhakshinamoorthy was the founder of the accelerator StartupMalaysia, he shared his contribution in everything.

You know: In 2013, the term “unicorn” was coined by Aileen Lee, founder of Cowboy Ventures, a seed stage venture capital firm. Unicorns are used to describe startup companies worth $ 1 billion, and are typically technology startups. As of November 2021, CB Insights reported that it exists More than 800 unicorns around the world.

Why is Malaysia creating unicorns?

Wild Digital SEA 2021 virtual scenario

Gopi took the virtual stage first, saying that acorns are important not only for definition, but also for what they represent. They are larger companies that are important in any ecosystem.

“And when you look at unicorns, the spillover effect is job creation, the supply chain, the ecosystem that a unicorn encompasses.”

He later cited a Startup Genome report that revealed that an agreement in any ecosystem would grow a country’s gross domestic product (GDP) by 10 times.

Rafiza took part with his two cents, saying unicorns could inspire entrepreneurs and growing startups to move forward. Hearing this, Dash compared the fact that humans sent some people to the moon to help the world’s aerospace industry grow.

Can our government agencies work together to achieve this goal?

Prior to MyDIGITAL, Gopi admitted that government agencies involved in the startup ecosystem worked independently, even if there was only a phone call from each other for discussion.

But now, the plan has brought these agencies together to harness each of their strengths to create the “right” ecosystem to grow unicorns. It is no longer a matter of each agency pursuing its own KPIs, but rather of coming together in pursuit of a national goal.

Rafiza affirmed that although he is technically a new child on the block, he has been observing Malaysia’s early ecosystem for a long time and it seems to be the first time he has seen all agencies actually communicate and work with each other.

Does Malaysia have the money needed to grow unicorns?

Based on the shares of the speakers, the funding does not seem to be worrisome, as both the MDEC and the Cradle Fund have said that the government has made a great effort to ensure that the ecosystem is well funded.

A brief overview of Dana PENJANA Nasional / Image Credit: Penjana Kapital

Last year, Penjana Kapital joined as a government company to launch the Dana PENJANA Nasional (DPN) program. By June 2021, he had It collected 850 million RM, Exceeding the target of RM288 million 3.7 times. 55% of all proceeds were also from foreign investors.

Other government agencies are also trying to promote Malaysian startups abroad and foreign venture capitalists (VCs) coming to Malaysia.

But Malaysia lacks talent, right?

Dash mentioned in discussions with several startups about the pandemic that they thought acquiring talent was scarce and expensive. Without talent, it would be almost impossible to grow our unicorns. What can be done then to address this issue?

Ashamed of not agreeing, Gopi clarified: “I joined MDEC in 2015 and I have always noticed that Malaysia has a lot of talent, that is talent that helps entrepreneurs or entrepreneurs.”

“Malaysia is a small country, but if you take a sector like banking and financial institutions, if you leave ASEAN, many of the main actors that support banks are Malaysian companies.”

So it’s true that we create good talent, but we don’t retain them very well. We also don’t hold our entrepreneurs very well. Going back to the project, that’s what he’s trying to correct.

Gopi Ganesalingam, Director General of Digital Industry at MDEC.

Rafiza also said: “We have talent, but they are not necessarily Malaysian.” However, people have approached him to learn how and how they can help Malaysian agencies and companies abroad.

He concluded from this that now that everything is digital, talents do not have to be in Malaysia to participate in our ecosystem.

Adding to this point, Gopi said, “So you can get talent from anywhere, even the best talent, if you can afford it, through any platform.”

He also knows that some large companies are now starting to pay much more for new graduates, giving an incentive to stay good candidates.

What measures are we using to ensure that Malaysia becomes a breeding ground for unicorns?

  1. Creating a new 5K startup with a working business model.
  2. Increase the startup rating to achieve the goal of 5 unicorns.
  3. 875K digitizing SMEs and SMEs.
  4. Achieve the target of RMB 70 billion in digital investments.

That’s what Gopi said on behalf of MDEC. Basically, the MyDIGITAL plan is similar to a report card, and MDEC, the Cradle Fund, and other agencies are working to achieve its goals.

On the other hand, the Cradle Fund has its 3 measurements, which are being closely monitored by each grant recipient.

First, it would be the potential for job creation for each recipient, and second, the Cradle Fund examines the potential for a startup to have more funding to assess its duration. Rafiza was pleased to explain that of all the Sendirian Berhad companies that have contributed so far, 8/10 are still around.

Third, they examine the contribution a company makes to GDP. Rafiza shared that the organization’s track record shows that the multiplier for job creation per grant recipient is at least 7.36x (even though Rafiza called it “external” except for the Gig economy and Grab).

Meanwhile, for each Ringgit of funding provided by the Cradle Fund, the recipient’s GDP contribution is multiplied by 3.35x. “So RM500K per [in grants], We get a contribution of RM1.5 million GDP, ”Rafiza said.

How will government agencies work to build a growing ecosystem of agreements with private stakeholders?

So far, a lot of information about Malaysian startups is fragmented. To complete a list of all the existing Malaysian startups or learn how to start your Malaysian startup, you will likely need to browse many sites without making sure you are fed the right information.

That’s why the Cradle Fund was awarded 20 million RM to launch the MYStartup platform who has to deal with these pain points. It will be a collaborative platform that public and private agencies can put in place to share data.

“It will save time for startup founders to focus on managing their business and allow them to find IP lawyers, investors, support, mentors, job seekers and so on,” Rafiza added. By the end of November, we could expect to see an MVP on the site.

On the MDEC side, the agency has already launched several programs to close the gap between itself and startups. Some examples are as follows 22 Digital Center, working with accelerators hackathons, fundraisers, Founders Grindstone programs, and so on.

Gopi said they have seen results with all of these, so MDEC will continue to develop and improve such initiatives.

– // –

The sharing of Gopik and Rafiza in this panel certainly provided more context for finding out why Malaysia is working on the creation of the agreements and how it wants to do so.

I think we are ready to really catapult the ecosystem and build more than just unicorns that are resilient, global, investing, and quality startups. We have talent, we have people, we have everything we need, all the secret recipes for building an ecosystem. So it is up to us whether we have the heart, the soul and the faith to accomplish all this.

Rafiza Ghazali, CEO of the Cradle Fund

Now, the Malaysian startup ecosystem and its stakeholders will be waiting for a breather to see how all the goals set will be realized. What results will we see in the next 4-9 years?

  • You can read more about the MyDIGITAL plan here.
  • Read Malaysian startup stories here.

Credit for outstanding image: Gopi Ganesalingam / Rafiza Ghazali



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