Venture scheme accelerates growth of start-ups

KUALA LUMPUR: The New Entrepreneurs Foundation's (myNEF) unit Rave Ventures Sdn Bhd is looking to raise RM50 million to RM100 million in the next five to 10 years for its business coaching and mentoring programme, called Rave Accelerator.

The 12-week accelerator programme, which consists of a network of experienced entrepreneurs and industry members, hopes to provide promising start-ups with venture building and funding.

Speaking to SunBiz after organising a Rave Mentor Pitch Night a few months ago, Rave Ventures' CEO Rizal Alwani said that the accelerator had previously signed on RM800,000 and RM1 million sized funds for its first and second batch programmes respectively.

Rizal said the accelerator would connect the founders of start-ups with its wide connection of investors and venture capitals, to ensure the start-ups get the right funding for their business.

Apart from that, he said it also makes sure that the founders get proper information and knowledge on how to conduct vesting agreements by providing advice and consultation.

"Working on a 90-day venture building methodology, we engage the selected start-ups to further refine their product, presentation and execution of their business. Our goal is not only to get start-ups to the next phase of funding, but also to ensure sustainability and growth," Rizal noted.

Meanwhile, on the objective of the Mentor Pitch Night, Rizal said it is to introduce the new third batch start-ups to the experienced entrepreneurs and industry members.

"Our goal is to find the right mentors for all the eight participating start-ups, where their mentors will help to guide and accelerate their businesses further."

The start-ups consist of social matchmaking service, known as "Halal Speed Dating", sports clothing e-commerce Summersault.my, home decorations e-commerce Jiham.my, Above and Beyond Concierge Services, JomJamban Bathroom Services, Laundry on the Go Services, MyMakBidan Services and Toy Library Club (TLC) Services.

The eight start-ups were short-listed from 400 young companies, and started their acceleration programme on Sept 28, 2015.

As part of their business coaching and mentoring programme, Rave Ventures also organises what is called as Demo Days for start-ups to be showcased to local and regional investors.

Demo Days are attended by key start-up ecosystem players including big IT companies, early stage funders, influencer and government agencies.

"We are basically backed by myNEF. For the last two batches, myNEF foundation has invested about RM400,000 into the programmes. Starting this July, myNEF allocated another RM500,000 for the operation costs," Rizal said, noting that the accelerator programme is wholly funded by myNEF since it began its first batch programme in July, 2014.

MyNEF, which was formed in 1997, is a non-profit organisation established by ICT and creative industry players in partnership with the government.

By Wan Ilaika Mohd Zakaria sunbiz@thesundaily.com

Startups put through paces 
 

The programme gives startups the right pressure and motivation to succeed, says Rizal.

SPEED and focus are vital in starting a business, particularly at the start-up phase, budding entrepreneurs heard at the “RAVe Mentor Pitch Night” at the New Entrepreneurs Foundation (myNEF) headquarters in Empire Damansara, Damansara Perdana on Oct 9.

“In focused programmes such as our accelerator plan, we make them do things in three months for things which companies use a year to achieve,” said RAVe Ventures Sdn Bhd chief executive officer Rizal Alwani. RAVe is a subsidiary of myNEF.

During the event, the third batch of eight start-ups were given an opportunity to pitch their ideas to mentors and investors.

“Our entrepreneurs are not exposed to the serious level of competitiveness in the tech eco-system and are also less hungry, so in our programme we give them the right pressure and motivation to succeed,” Rizal said.

The eight start-ups, shortlisted from over 400, had to work up to 4am in the morning to achieve their respective deliverables.

“They were all given deliverables, including their three-month revenue target, and they had to find ways to achieve it, including applying guerilla marketing campaigns,” he added.

The accelerator had been running the programme since 2014.

“By the end of the three-month period, we hope they will become investible companies, be it by grants or by venture capitalists,” Rizal said.

Some of the ideas that the start-ups pitched on that night included being a tech platform for helper services including things like cleaning residential and office spaces, laundry service, post-natal care, purchase of wall furnishings. There was even an idea for a halal speed dating service.

The start-ups were given an opportunity to do a short presentation on their business model, their motivation for doing it and what had been achieved so far.

Subsequently, they were asked by mentors and investors on how they would acquire customers and the acquisition cost. Some mentors also recommended contacts to help the start-ups.

Rizal concluded that the event was to prepare the start-ups of what was to follow.

That would be Demo Day for local investors in December and subsequently in Singapore for investors from the South-East Asian region.

By Lim Wing Hooi The Star/Asia News Network

Related posts:

Building the startup ecosystem

To build a successful ecosystem, you need to first identify the end goal. Then, piece together all the components and players that will p...

 

Crowdfunding is slowly gaining credibility, helped...

How property prices are determined?

Factors affecting prices - It is not easy to predict trend as the property market involves all kinds of players

THE year 2015 will always be considered one of the more challenging years for the property sector, with several factors coming into play and leaving potential buyers and investors cautious.

Looking back, Jordan Lee & Jaafar executive director Yap Kian Ann says there were many factors – be it microeconomic or macroeconomic, political, social, among others, that affected the property market performance and its pricing either directly, indirectly and/or jointly.

Click for actual size: http://clips.thestar.com.my.s3.amazonaws.com/clips/business/property-prices-chart-1912.pdf

“These factors are inter-related and influence each other. Individually, they give direct and indirect impact to the property market, property transaction volume and property prices at a different direction and degree.

“As the property market involves players (buyers and sellers) with all kinds of behaviour and is subject to a combination of factors that affect its performance at a given point in time, it is not an easy task to predict its trend and degree accurately.”

Looking ahead, property consultancy VPC Alliance (KL) Sdn Bhd managing director James Wong expects 2016 to be more subdued than this year.

Wong says most developers have launched their products aggressively in 2014.

“They knew the market this year would be soft and this softening would be carried forward to 2016. The full impact of the expiry of the developers’ interest bearing schemes (DIBS) will be felt next year.

Under DIBS, property buyers need not service the loan until the property is completed. Introduced in 2009 as an incentive, speculators purchased multiple units under DIBS because of the initial low outlay.

He expects to see softening demand in the high-rise high-end residential sector in the central region of the Klang Valley in 2016. Landed residential property demand is still resilient, especially with the gated and guarded community concept. House prices are expected to “self-correct”, he says.

Wong says foreign investors are actively monitoring residential properties in Kuala Lumpur due to weak ringgit but they remain cautious.

The increase in interest rates by the Federal Reserve after nearly a decade is also keenly watched. Already, reports are filtering out that Federal Reserve’s sway on global interest rates is causing a sharp jump in Singapore’s benchmark borrowing cost, squeezing growth in the small Asian city-state.

On a state by state basis, MIDF Research said earlier this month that Johor’s house price index showed the slowest growth year-on-year at 3%, Penang (3.5%) while Selangor fared better at 6.2%, followed by Kuala Lumpur’s 5.3%.

“We believe that the outlook for property price is better in Greater KL (Selangor and KL) due to support from the urbanisation factor.”

Citing Bank Negara statistics, the research house also noted that demand for property loans declined 13% year-on-year in October 2015 to RM25.19bil.

“This was weaker than September 2015, which declined 9% year-on-year. On a monthly sequential basis, the data was 1% lower. We are negative on the data as the number was showing nine consecutive year-on-year declines since February 2015.

“Year-to-date October 2015, loans were lower by 7% year-on-year to RM253.88bil. In our view, consumer appetite for big ticket items such as property remains low due to the rising cost of living and the weakening ringgit.”

By Eugene Mahalingam The Star/Asia News Network

Related posts:

To fellow US interest rate hike or to cut rates?

Emerging economies in a dilemma on whether to follow suit or cut rates “Specifically, we expect rate cuts in India, Indonesia, South...
 

The global impact of the US interest rate rise

Fear factor: Traders working in the S&P options pit at the Chicago Board of Options Exchange in Chicago, illinois. The prospect of th...

Penang Forum concerns over hill clearing and floods; the Declaration & Recommendation

DUnder fire over hill slope developments

Penangites upset with approval of high-rises on slopes...

GEORGE TOWN: The Penang government has come under fire for the clearing of hills and high number of high-rise buildings approved on slopes above the permitted 76m and 25-degree gradient.

Environmentalist and scientist Dr Kam Suan Pheng claimed that massive hill clearing from 2008 to 2015 at Pantai Acheh and Teluk Bahang endangered the lush hills at the Penang National Park boundary where the Teluk Bahang Dam is situated.

She also said the state government claims to listen to the people but went ahead and redesignated Bukit Relau, infamously known as Botak Hill, as a residential zone in 2012 amidst massive protest against the development of the hill.

She also decried the big number of projects approved on slopes above 76m and 25-degree gradient when the Penang Structure Plan clearly stated that there could be no development on such slopes.

Dr Kam was delivering a talk titled, ‘What is happening to our hills’ at the Save The Hills of Penang public forum at Dewan Sri Pinang here yesterday.

A handout distributed to the 300-odd participants of the event claimed that 30 blocks of high-rise buildings were approved on such slopes in Paya Terubong, 15 blocks in Bayan Lepas, 14 blocks in the Tanjung Bungah/Batu Ferringhi belt and nine blocks in Teluk Kumbar/Balik Pulau.

Universiti Sains Malaysia deputy vice-chancellor Dr Sharom Ahmat said hill development above 76m could be approved under ‘special projects’ if it benefits the masses but added that “bungalows costing RM4mil to RM5mil are barely for the people.”

In his talk titled, ‘Why are we here today?’, he claimed that public hearings seemed to be more of a formality as decisions were made before such hearings.

Environmentalist and engineer K.K. Lim, in his presentation ‘Are our hills protected by the government’, said the rampant development on the hills could see a repeat of the Highland Towers tragedy in 1993.

He said soil erosion due to rain and the lack of water retention because of hill clearing could bring a major disaster in the event of a landslide.

In her talk ‘Hill Offenders: Fine? Jail? Nothing?’, lawyer Datuk Agatha Foo said the RM500,000 and RM50,000 fines for violations under the Town and Country Planning Act and State Drainage and Building Act respectively were not a deterrent.

“It is merely a slap on the wrist,” she said, claiming that developers pay the fine as part of their development expenditure.

A declaration was made at the end of the half-day forum. It among others, urged the state government to comply with its own policy of prohibiting development on hill land above 76m or greater than 25-degree gradient and not to include ordinary residential buildings as special projects.

It also called upon the state government and Penang Island City Council to prosecute violators to the full extent of the law, including imposing jail sentences and to blacklist all offenders for future development projects.

Two PKR elected representatives were among those who attended the event organised by the Penang Forum which is a loose coalition of public-interest civil society groups. They were Bayan Baru MP Sim Tze Tzin and Batu Uban assemblyman Dr T. Jayabalan.

By Sekaran The Star

Forum Declaration & Recommendation:

Related posts:

Save Penang Hill from the greedy

Uphill battle: A hiker passing by a vegetable farm on Penang Hill overlooking Air Itam. penangforum.net Treasured heritage seems t...

• 

  Penang flood aftermath: design pump system needed to drain out water, fix funding snag ...

  Good plan needed to drain water from flood-hit areas PENANG’S drainage system is unable to cope with heavy rain falling within a short ...
• 
   Errant hill clearing by developers causes of floods, sinkholes, seepages damaged houses!
  

  • Errant hill clearing by developers causes of flood, sinkholes, seepages, damaged houses.

Save Penang Hill from the greedy

Uphill battle: A hiker passing by a vegetable farm on Penang Hill overlooking Air Itam.

penangforum.net

Treasured heritage seems to be losing its charm to illegal farms and development

THE stall at the Air Itam market in Penang is said to offer the best asam laksa in Malaysia.

Rain or shine, it pulls in the crowd.

The ingredients for the dish such as ginger bud (bunga kantan), mint leaves (daun pudina), laksa leaves (daun kesum) and kalamansi limes (limau kasturi) come from Penang Hill, which is less than 200m away.

Farmers who cultivate the land at the hillslope sell their produce at the wet markets on the island.

The fertile hillslope from Air Itam to Paya Terubong is cultivated with vegetables and fruits.

Demand for the produce is so great that farmers are illegally clearing the hillslope to expand their farms.

About 2km from the market along Jalan Paya Terubong, there is a trail leading to a hillslope.

Lately, hikers and mountain bike enthusiasts have been using the trail to reach the 135-year-old Cheng Kon Tse Temple, nestled on the slope of the hill.

Travellers can see vegetable farms and fruit trees on both sides of the trail.

There are nutmeg trees, kalamansi lime trees, papaya and banana trees.

The vegetables include lemon grass, lady fingers and sweet potato.

As one continues walking up, a large swathe of hillslope which had been cleared near the telecommunication towers comes into view.

The bald patch can be seen from the Paya Terubong road below.

The slopes on Penang Hill have been cleared by farmers over the past few decades.

Such illegal hillslope clearing has been raised by environmental groups but there has been no firm action from the authorities.

A former Penang Island City Councillor claimed that he had provided pictures of the clearings to state leaders and that he had also raised the matter with the Consumers Association of Penang and Malaysian Nature Society.

“The press should continue to highlight the issue so that something is done finally,” said the former councillor who did not want to be identified for fear that the farmers might go after him.

“Penang Hill is our heritage. But no one seems to bother,” he said.

Besides Penang Hill, bald patches are also appearing on hills in several parts of the island.

Bukit Relau in Jalan Bukit Gambier has been dubbed “botak hill”.

There is also hill clearance in Bukit Kukus in Paya Terubong and Bukit Laksamana, a water catchment for the Teluk Bahang Dam.

More and more hillslopes are going bald because of developers and contractors who cleared the land without the authorities’ approval.

The clearings are done on weekends and smoke can be seen from far when the trees are burnt.

A large swathe of land has also been cleared at a place referred by hikers as level 45 station.

It should not be difficult to nab the culprits since there are cemented trails all over the hillslopes in Air Itam and Paya Terubong.

When The Star reported on Feb 14 last year that more bald spots could be seen, a state exco member said they had pictures of the illegal activity and that action would be taken against the culprits but till now, no one knows what the action is.

It is troubling that all this is happening under a state government which emphasises on Competency, Accountability and Transparency.

Penang Hill seems to be losing its charm.

Yet, the state government seems to be focused on mega projects and land reclamation.

At a state assembly sitting last month, Chief Minister Lim Guan Eng said the Penang Island City Council was using drones to check on illegal hill clearing and CCTVs would be installed next year to monitor illegal earthworks.

The spate of hill clearings has prompted the Penang Forum, a coalition of public interest NGOs, to hold a forum on Save the Hills of Penang tomorrow.

Hopefully, the outcome from the event will reach the right ears.

There is a compelling need to save the hills from greedy farmers and developers.

Comment by K. Suthakdar

Related posts:

Penang flood aftermath: design pump system needed to drain out water, fix funding snag ...

Good plan needed to drain water from flood-hit areas PENANG’S drainage system is unable to cope with heavy rain falling within a short ...

Errant hill clearing by developers causes of floods, sinkholes, seepages damaged houses!

• Errant hill clearing by developers causes of flood, sinkholes, seepages, damaged houses.

Real estate crowdfunding in Malaysia

CROWDFUNDING – the practice of funding a project or venture by raising small amounts of money from a large number of people typically using an online platform – has gained popularity due to the massive demand and supply in today’s competitive market.

In one way, it benefits start-ups and entities that require funds to either commence or expand their business portfolio.

Investors have the opportunity to participate in any potential investment that they are comfortable with and which corresponds to their personal investment portfolio via a simple click online. It is a chance to participate early in something potentially very big.

The Securities Commission has approved six equity crowdfunding platforms for issuers to offer share subscriptions to interested investors. This comes with strict compliance and regulations imposed on the platforms providing such equity crowdfunding services. The good news for investors is that these platforms, which represent another type of investment option, are expected to be launched very soon.

Rising property prices have increased the investment cost for real estate investors. Consequently, real estate investment trusts, which offer liquid stakes in real estate complemented by constant dividend yields, have become fashionable. Alternatively, real estate investors may also leverage on the informal real estate investors club that attracts a lower acquisition cost with bulk purchasing arrangements with developers.

We can draw one conclusion from these real estate investment options – that property investment is no longer an individual game but a team sport that thrives on leverage and collective bargaining.

There are even suggestions that political parties raise funds via crowdfunding in a bid to promote transparency and efficiency. This makes it easier to comprehend the call for crowdfunding in a sector like property. So, how does real estate crowdfunding work?

Online platform

The basic concept of crowdfunding is an online platform operated by an approved operator and regulated by a certain ministry that provides services to matchmake the issuer and the investor. The obligation of the operator is to conduct sufficient due diligence on the issuer and its product prior to allowing the issuer to campaign for fund-raising on its online platform.

To promote independence, there should not be any relationship between the operator and the issuer, and the operator should not personally join the fund-raising campaign by the issuer. Besides this, the operator has to approach private financial institutions or trust companies to set up trust accounts for the investment funds to capture, as trustee, those investors who are willing to invest in the issuer.

Similarly, to remain independent, the operator should not be related to the private trustees or financial institutions.

In this investment option, the utmost requirement for the issuer is that they shall be either a developer, a real estate agency or a land owner who owns the property slated for development and who is seeking to raise funds for that purpose. The operator may perform due diligence on the land background and require the issuer to show proof of ownership of the said land and also the proposed development plan. These are to be advertised on its platform as convincing tools to attract investors.

Nonetheless, contrary to conventional real estate investment where you would get the key to the property and may use it as a tangible asset for further financing in the future, any investment into the real estate crowdfunding platform does not give you ownership of an immovable property, unless it is agreed upon and offered by the issuer based on its fund-raising campaign.

The upper hand here is that the expected term for your return on investment (ROI) may be fixed and shorter. Investors may receive the expected ROI upon completion of the development. The investment amount is also within an affordable limit, and information is easily accessible via the Internet. Crowdfunding also promotes transparency in one’s investment and with collective investors, the bargaining power with the issuer is also greater as compared to individual investors.

Real estate crowdfunding might still be a new concept and some might have never heard of it until now, but with real estate investment running the risk of remaining merely a dream for the mid-range salary earner, it might be a good alternative to maximise returns on your hard-earned money without a hefty price tag.

However, as with all forms of investment, there are risks involved here despite the due diligence performed by the operators. Smart investors, nonetheless, always walk the extra mile to conduct their personal due diligence on the accuracy of the information made available on the crowdfunding platform.

The current regulatory framework only permits equity crowdfunding for the real estate business and is not yet a direct crowdfunding avenue into the acquisition of real estate.

By Chris Tan Real legal viewpoint

Chris Tan is the founder and managing partner of Chur Associates.

Related posts:

High cost under new law may affect property investors' profit marg...

 Startups vying for the attention of Venture Capitalists ...

Is Proton seen headed in the right direction?

Proton has been trailling fellow national carmaker Perodua since 2006 in terms of sales

THE recent announcement by automotive conglomerate DRB-Hicom Bhd that it plans to raise RM2bil in funds, mostly to help turn around wholly-owned carmaker Proton Holdings Bhd, is seen as a move in the right direction by many.

One industry observer points out that Proton needs to develop new technology to help keep it competitive.

“For any automotive company to survive and be competitive, it needs to develop new technology on a continuous and consistent basis.

“Unfortunately, this has been a challenge for Proton.”

Proton’s lack of economies of scale is a major issue for the car company, he says.

“The pricing of its vehicles can be more competitive. However, this is not the case as the company can’t bring down the unit price of its vehicles as its development costs are spread across a smaller number of units, unlike many of its foreign competitors.”

Proton has been trailing fellow national carmaker Perusahaan Otomobil Kedua Sdn Bhd (Perodua) since 2006 in terms of sales.

While Proton has been struggling over the years sorting out issues such as its sales performance, quality issues and after sales woes, among others, Perodua meanwhile has been steadily thriving.

In 2005, Perodua, which was still behind Proton in terms of sales, launched its iconic Myvi compact car, a model that changed the automotive landscape and turned the tides in favour of Perodua.

The Perodua Myvi has been the best-selling car in Malaysia for eight consecutive years from 2006 and 2013. The model accounts for about 50% of Perodua’s annual sales.

According to data by the Malaysian Automotive Association, Proton sold a total of 138,753 vehicles in 2013 compared with 196,071 vehicles sold by Perodua in the same year.

Recently, Proton launched the highly anticipated Iriz, which, to many, is considered a game-changer for the company and is regarded as “the car” to protect its market share and directly take on the Myvi.

An automotive analyst points out that added funds are necessary for Proton to come up with not only new technology, but new competitive models as well.

“DRB-Hicom reportedly spent RM500mil to develop the Iriz and the car has been very well received by the public. Therefore, Proton needs more such models to boost sales and grow its marketshare, which is what justifies the need for added funds,” he says.

Earlier this month, DRB-Hicom announced that it was launching a perpetual sukuk programme to raise funds of up to RM2bil, which Malaysian Rating Corp Bhd (MARC) expects will be channelled to Proton.

The rating firm has assigned a preliminary rating of AIS to the group’s proposed perpetual Sukuk Musharakah programme of up to RM2bil. It also affirmed its AA-IS rating on DRB-Hicom’s existing Islamic medium term notes (IMTN) programme of up to RM1.8bil.

Both ratings carry a stable outlook. The two-notch rating differential between the perpetual sukuk and IMTN is in line with MARC’s notching principles on hybrid securities.

The proposed perpetual sukuk is non-callable within five years of issuance and has profit distributions that are cumulative and deferrable on an unlimited timeline.

MARC says the affirmed rating on the IMTN incorporated DRB-Hicom group’s strong market position in the domestic automotive industry, underpinned by a diverse range of car marques and a long operational track record.

It adds that the rating was also supported by a moderately diversified revenue stream from other businesses that included concessions, logistics and property development.

However, MARC has pointed out the ratings are constrained by the group’s large borrowings and its continued reliance on external funding to accommodate expansion and acquisition plans.

An analyst says the sukuk is unlikely to adversely impact DRB-Hicom’s credit profile.

“DRB-Hicom’s debts jumped in 2012 when it acquired Proton.

“Nevertheless, we believe that the sukuk is not designed to place pressure on their earnings.”

MARC, meanwhile, says that Proton’s short term liquidity concerns had eased somewhat following the completion of subsidiary Lotus Group International Ltd’s (Lotus) £207.30mil (RM1.1bil) debt restructuring into a longer tenured debt.

RHB Research Institute director and head of research Alexander Chia says Proton pays a high amount of finance cost per year to pay-off the borrowings it took to acquire Proton in 2012. “DRB-Hicom borrowed RM3bil to buy Proton and is currently paying over RM300mil in finance costs annually, which is a huge chunk of group profits. Proton’s marginal contribution to earnings is not helping matters.

“DRB-Hicom’s balance sheet is over-leveraged and Proton is also not contributing to help boost their earnings,” he says.

According to DRB-Hicom’s financial report for the financial year ended March 31, 2014, its finance cost stood at RM292.38mil.

Alternatively, another analyst says it is vital for Proton to collaborate with a globally-established original equipment manufacturer to enhance its competitiveness.

“A strategic partner can help fasttrack Proton’s presence in the global automotive arena. It also needs to be able to expand its export market.

He notes that tying up with a partner can also help Proton to reduce its costs.

It was reported recently that Proton and Honda Motor Co Ltd are currently engaged in a series of meetings to explore the possibility of collaborating in the field of technology enhancement, new product lines and sharing of platform and facilities.

International Trade and Industry Minister Datuk Seri Mustapa Mohamed has commented that this venture is expected to help Proton save millions in investment and development time for a new model.

According to MARC, Proton’s debt level rose by 24.1% year-on-year to RM1.79bil, which led to an increase in the car manufacturer’s debt-to-equity (DE) ratio to 0.58 times for financial year ended March 31, 2014 (FY14) (FY13: 0.38 times).

BY EUGENE MAHALINGAM The Star/Asia News Network

Related:

All Models for Proton, New Car Reviews, Photos, Prices ...

Proton Iriz Infohub - Paul Tan's Automotive News

Proton Price Promotion Malaysia

protonprice.com/

Proton Price.com monthly review for the Proton promotion and rebates for Proton ... Proton Exora, Proton Satria Neo R3, Proton Saga FLX and the new Saga SV .

Saga - Proton Price Promotion Malaysia

protonprice.com/saga/

The car is part of the Saga FLX model range, but will simply be known as the Saga ... All the on the road prices are based on Peninsula Malaysia only and are ...