NEWS: Local startups impress VCs

KUALA LUMPUR: Every single one of the 20 startup companies that pitched ideas to venture capitalists (VC) at the sixth MSC Malaysia InnoTech event are in further talks on seed funding possibilities.

These startups initially received pre-seed funding of RM150,000 each from MSC Malaysia’s Pre-Seed Fund to create prototypes and are now seeking further funding (seed funding) from VCs to market their products.

These companies are collectively seeking RM75mil in VC funding.

“Although there is no certainty of these companies receiving funding, the fact that there is sustained VC interest after the initial pitch is encouraging,” said Roslan Bakri, director of technopreneur and enterprise development of the Multimedia Development Corporation, which is the guardian of the MSC Malaysia initiative.

The MSC Malaysia initiative is aimed at building up the nation’s knowledge-based economy.

“It could be another three years before these companies receive seed funding. This is because a lot of due diligence is needed but the fact that the startups have garnered VC interest after a 15-minute pitch is commendable,” he said.

Roslan said that last year, only five of 20 startup companies received the same degree of VC interest. However, these companies have so far received up to RM8mil collectively in VC funding.

“When MSC Malaysia InnoTech first started, only one in 20 startups received VC interest. Over the years, more and more startups have received VC interest after the pitch sessions,” he added.

Roslan explained that this increase in the success ratio is due to the fact that the startup representatives go through a four-month programme where they are “drilled” by seasoned entrepreneurs.

“They make them go over their 15-minute pitch until it is perfect. It is a very high pressure situation but it prepares the startups for their big day at MSC Malaysia InnoTech,” he said.

MSC Malaysia InnoTech is an annual event that connects startups under the MSC Malaysia Pre-Seed Fund Programme with foreign and local VCs for further funding.

Representatives from 20 startup companies pitched their ideas to 14 VCs this year.

Roslan would not reveal the nature of the startup companies but the VCs are mix of local and foreign organisations which, collectively handle a total fund size of RM500mil.

Mentorship

In related news, a new initiative called the MSC Malaysia Mentor Programme (M3P), was also launched at MSC Malaysia InnoTech.

M3P is a four-month programme to guide MSC Malaysia companies to move up the value chain. It involves weekly face-to-face meetings and online access to the mentors.

There are 11 mentors including Bob Chua, chief executive officer of Pulse Group Bhd; Micheal Lai, chief executive officer of Packet One Networks (Malaysia) Sdn Bhd; Abdul Rani, chief executive officer of CWorks Systems Bhd; Wilson Tay chief operating officer and chief knowledge officer, Malaysian Institue of Management; Mark Chang, executive director of Jobstreet Corporation Bhd and Chris Chan, chief executive officer of The Media Shoppe Bhd.

Forty MSC Malaysia and MSC Malaysia Pre-Seed Programme Fund recipients have been chosen for the M3P programme.