MaGIC And Penjana Kapital Aim To Resolve Funding Gap Issues For Startups

It has always been difficult to secure funding if you’re a startup and look to scale your business to the next level. Financial institutions have yet to wrap their heads around the startup phenomena, venture capitalists are looking for larger scale and even a bigger stake but for fledglings who have promising ventures become doubtful when they get turned away once too often.

Perhaps this where Magic or Malaysian Global Innovation & Creativity Centre has played its role well in nurturing these young innovators who get promoted to become entrepreneurs. However they do hit a road block in funding and scaling their business further as pitching and securing investment should be their own effort. Again, Magic has been hearing these issues once too many and decided to work in resolving this aspect of the ecosystem for these bright shoots to grow. Hence, together with Penjana Kapital they are collaborating to unlock potential investment opportunities for innovative start-ups.

In bridging the funding gap faced by start-ups, MaGIC will funnel its alumni, in particular seed stage start-ups, to venture capitals under the Dana Penjana Nasional programme. 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 is aimed at bridging the funding gap in the country by incentivising private capital to facilitate the growth of start-ups and create an enabling environment for these start-ups to scale and expand their reach internationally.

Under the programme the Government will match 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 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.

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

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

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

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