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Showing posts with label incubating. Show all posts
Showing posts with label incubating. Show all posts

Wednesday 17 December 2014

Startups sharing ideas and seeking validation from others to progress and gain benefits - final part 10

Start building relationships with investors

ENTREPRENEURS are naturally protective of their ideas. Understandably, they keep their ideas to themselves to avoid having them stolen.

Don't keep it to yourself Tell your idea to as many people as possible and seek their opinions. Talk with people you trust and whose opinion you value.

While it is important to protect proprietary information from being copied, entrepreneurs can also gain valuable insight and perspective from feedback before investing heavily in a product that only looks good conceptually.

A startup’s journey is very much akin to running a series of experiments before it finds a path to sustainable growth. A product or an idea should be subjected to validation before it can be tweaked and scaled up to form a viable company.

And what better way to get some form of early validation than to share your ideas with like-minded people for constructive input.

While entrepreneurs are more willing to share and discuss their ideas these days, this culture of sharing is still new in the local scene.

Seasoned entrepreneurs have found bouncing ideas off other people to be more helpful than harmful. Apart from getting feedback on their ideas, they note that more often than not, sharing connects them with other people who can help fill the gaps and turn ideas into reality.

Additionally, sharing ideas and resources could also help accelerate innovation in a field.

For example, American electric car manufacturer Tesla Motors recently announced that it will be making its patents available to other companies that want to use them.

Tesla chief executive officer Elon Musk explained that the move would help advance electric vehicle technology.


 Elon Musk, CEO of Tesla, unveils the dual engine chassis of the new Tesla 'D' model at the Hawthorne Airport October 09, 2014 in Hawthorne, California.

“Our true competition is not the small trickle of non-Tesla electric cars being produced, but rather the enormous flood of gasoline cars pouring out of the world’s factories every day,” Musk had said.

By allowing the use of its patents, industry observers note that Tesla will be clearing the way for more collaboration with other electric car makers to develop new technologies and would enable the company to take a leadership role in developing standards for the industry and its value chain.

Entrepreneurs are increasingly being encouraged to share and collaborate to innovate and build better products.

And a beauty about being in the present time is that there are more ways than ever to tap into a support network that can provide startups with a platform to share and build on ideas and resources.

Some of these platforms include spaces such as incubators, accelerators and co-working spaces. Apart from being just a shared working station, incubators, accelerators and co-working spaces have evolved into collaborative work spaces that provide entrepreneurs with the opportunity to meet and collaborate on ideas with a host of other people to innovate better solutions.

Additionally, there are various forums as well as startup events and programmes that provide a conducive environment for entrepreneurs to network, share ideas and work together. There are also a number of agencies that are targeted at guiding entrepreneurs with developing their ideas.

Most entrepreneurs still worry about letting on too much on their ideas. But if they can overcome that fear, entrepreneurs stand to gain much from collaborating with one another.

Take advantage of the entrepreneurial community brought together by such platforms to innovate and rather than develop your ideas in silos.

■ This is the final article in a 10-part tie-up between Metrobiz and the Malaysian Global Innovation & Creative Centre (MaGIC) to explore startup ecosystems.

By Joy Lee The Star/Asia News Network

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Successful entrepreneurs join forces to fund and support businesses Malaysia has seen quite a number of successful entrepreneurs coming i...



OOI Boon Sheng, founder and chief executive officer of Web Bytes Sdn Bhd, was fortunate to have found a good

Friday 12 December 2014

Startups rising from failure - part 9

“Failure is simply the opportunity to begin again- this time more intelligently.” — Henry Ford

Startups can learn much when they do not succeed

Success stories have always been a source of great encouragement for struggling entrepreneurs. It seems easy enough to romanticise accomplishments.

After all, there seems to be no shortage of stories on budding entrepreneurs who worked hard to develop great products that were later acquired for hefty price tags.

Perseverance pays: Grove says he learnt the value of persistence when the bursting of the dotcom bubble drastically altered the company’s fortunes in 1999.

In reality, the path of entrepreneurship involves plenty of speed bumps, potholes and dead ends.

Entrepreneurs who have made it often recount how they lacked time for anything other than work, how they had to fumble through everything on their own and how some of their ventures failed before they became successful.

Additionally, entrepreneurs are making a big bet by putting their money into something that has no promise of returns on top of not having a secure income for what can be extended periods.

But serial entrepreneurs persevere through their failures.

Patrick Grove, co-founder and chief executive officer of Catcha Group, understands the importance of picking up the pieces and persisting after a failed attempt.

Grove established Catcha Group, which holds a portfolio of online assets, in 1999 and had plans to list the group on the Singapore Exchange the following year.

But shortly before the exercise, the Nasdaq crashed and brought the end of the dotcom bubble.

Subsequently, Grove and his partners were saddled with debts of US$1.5mil (RM5.2mil).

Teetering on the brink of bankruptcy, he slashed his headcount, diversified the business and persisted.

Grove refers to that period as “the school of hard knocks.”

But in the end, Catcha got its groove back and Grove went on to list four online companies.

“I learnt the value of persistence… because we were humbled early on, we don’t forget that,” Grove said in an interview with an Australian publication, adding that it is alright if entrepreneurs fumble.

MyTeksi technical head Aaron Gill is likewise no stranger to failure. Before joining the Malaysian startup that has grown regionally, Gill had three failed ventures under his belt.

His ventures had started off with ideas good enough to obtain government pre-seed funding from the Multimedia Development Corp and Cradle Fund. But the companies did not survive.

However, Gill says that his failed attempts taught him a lot about running a company and managing a team.

Additionally, he learnt the importance of being focused when running a business and the need for structure in the face of expansion.

Grove and Gill are only two of many more entrepreneurs who have encountered hardships before finding that one successful startup. The road taken by entrepreneurs is often long, winding and certainly stressful.

But fear of failure shouldn’t stop entrepreneurs from taking risks. There are rewards to be reaped from thinking outside the box and pushing boundaries.

The lessons learned from failures can be brutal. But taken the right way, these lessons can bring you one step closer to success.

Entrepreneurs describe themselves as people who hop from one failed business to another until they hit a jackpot. To them, failure is a part of their experiences.

■ This is the ninth article in a 10-part tie-up between Metrobiz and the Malaysian Global Innovation & Creative Centre (MaGIC) to explore startup ecosystems.

By Joy Lee The Star/Asia News Network

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SoftBank Invests $250M In GrabTaxi, Uber’s Archrival In Southeast Asia Not content with leading a $627 million mega-round for Snapdeal...


Successful entrepreneurs join forces to fund and support businesses Malaysia has seen quite a number of successful entrepreneurs coming i...




OOI Boon Sheng, founder and chief executive officer of Web Bytes Sdn Bhd, was fortunate to have found a good

Saturday 6 December 2014

SoftBank invests $250M (RM860mil) in GrabTaxi, an Internet company founded in Malaysia


SoftBank Invests $250M In GrabTaxi, Uber’s Archrival In Southeast Asia

Not content with leading a $627 million mega-round for Snapdeal and a $210 million raise for Ola as part of a $10 billion commitment to startups in India, Japanese telecom giant SoftBank has now turned its attention to Southeast Asia and sunk $250 million into GrabTaxi, Uber’s major rival in the region.

Neither party has confirmed what the deal values GrabTaxi at, but the company’s valuation is likely to exceed the $1 billion mark. The duo did confirm that SoftBank has become GrabTaxi’s largest investor.

The round is the highest raise for a startup in Southeast Asia to date — Rocket Internet companies aside — and it is GrabTaxi’s fourth funding activity this calendar year, taking it past $320 million in capital from investors. GrabTaxi’s previous $65 million round closed in October and was led by Tiger Global — which also invested in Uber rival Ola — while GGV Capital led a $15 million raise in May. Its $10 million-plus Series A was announced in April.

GrabTaxi was founded in Malaysia in 2012, has over 500 staff and is live in 17 cities across six countries in Southeast Asia: Malaysia, Philippines, Thailand, Singapore, Vietnam and Indonesia. Its core offering is a service that connects registered taxis with would-be passengers via its app — thus working with the existing industry rather than against it — but it also offers an Uber-like private car service and is trialling motorbike taxis in Vietnam.

Uber is present in each of GrabTaxi’s markets, offering its standard Uber Black service in all and its cheaper UberX service in most. Hailo is present in Singapore, while Rocket Internet-backed Easy Taxi is a minority player in a handful of countries in Southeast Asia.

Uber doesn’t break out user numbers, but GrabTaxi — which says it is leading the taxi app space in Southeast Asia — claims 500,000 monthly active users from 2.5 million app downloads. It says there are 60,000 drivers on its network, and that three bookings are made per second on average across its platform — which is an 800 percent increase over the past year.

Back in May, GrabTaxi claimed 1.2 million downloads and 250,000 monthly users.

 

Collecting War Chests

This Series D round comes at a fascinating time. Uber raised $1.2 billion earlier this year and is tipped to be closing in on another billion-dollar round again soon at a rumored $40 billion valuation. GrabTaxi, it seems, is building its own war chest, and bringing on a formidable ally in SoftBank, at just the right moment.

anthony tan grabtaxiGrabTaxi didn’t explicitly reveal how it will invest the money from SoftBank, but CEO and co-founder Anthony Tan told TechCrunch in an interview that it will go towards fortifying its efforts in existing markets and continuing its expansion across Southeast Asia.

There are no plans to move outside of the region, which has a cumulative population of around 600 million, he said.

“We’re going to be staying regional. [We want to] grow very fast and focus on expanding in this region, whilst staying very very focused,” Tan commented, speaking after the Bloomberg ASEAN Business Summit in Bangkok, Thailand.

“We’ll also be hiring. We want the right kind of people, people who love people and believe in our mission,” he added.

Related to that, Tan said GrabTaxi is open to potential acquisitions, but he stressed that in any possible deal, the focus would be on finding the right cultural blend.

GrabTaxi has been focused on providing a pure-play transportation service to date. Uber, however, has experimented with a range of alternative services across the world. While he didn’t explicitly advocate that GrabTaxi will follow suit, Tan did admit that the company’s new funding intake gives it “the resources” to potentially explore new areas of business in the future.

 

Price Battles

Harvard graduate Tan admitted that the price battles between rival services in Southeast Asia necessitate significant funding just to compete, although he said GrabTaxi still maintains the “heart of a startup” — such as working hard, traveling via economy class and low-cost carriers where possible — and generally being thrifty.

While Uber has raised boat loads of money for its operations, the company is engaged in every continent on the planet. That’s something that could mean GrabTaxi is actually better capitalized, which Cheryl Goh, GrabTaxi’s VP of marketing, hinted.

“Our strong focus in this region means that each of [the] six GrabTaxi markets stands to receive a significant portion of funding compared to larger players that have to stretch their funding much further,” Goh said in a statement without explicitly mentioning the ‘U’ word.

While SoftBank provided the entire round for GrabTaxi, TechCrunch understands that the startup had multiple alternative offers on the table. That certainly bodes well for the future, since GrabTaxi’s track record and the ongoing battle will almost certainly require further rounds of funding in the not-too-distant future.

Uber, GrabTaxi and others have come under pressure from the governments of Vietnam and Thailand this past week, and numerous other regulators in the past. Tan didn’t provide specific comment on either of those incidents, but he did reveal that GrabTaxi has set up a dedicated government liaison team that works directly with authorities across Southeast Asia to help smooth out issues and communications.

Southeast Asia’s startup scene continues to heat up. Just last week Carousell raised $6 million and PocketMath bagged $10 million. But this investment from SoftBank is sure to put the region on the map, particularly coming right after Rocket Internet’s Amazon rival Lazada raised $250 million led by Singapore’s Temasek Holdings.

SONY DSC

 

Making a Difference

When I put it to Tan that many founders will want to know how he’s been so successful in Southeast Asia, he points to his faith in God and his company’s mission to make a difference.

“There are a lot of well-run startups in Southeast Asia. We hope that the values we’ve been pushing for — helping drivers make more money, women feel safer and more — and changing the current ecosystem and how we treat each other makes a difference,” he explained.

With SoftBank and its renowned founder Masayoshi Son on his side, Tan’s company is closing out the year in a very different position to how it began 2014. Then it was an outsider that was full of ambition and plans but lacking resources. Now it has gathered steam in multiple markets and pulled in the financial muscle to potentially battle Uber, one of the world’s most talked-about companies, blow for blow.

Certainly, 2015 is gearing up to host a fascinating battle between these two, particularly now that SoftBank has stepped into the ring.

Source: techcrunch.com by Jon Russell

Japanese group invests RM860mil in Internet company founded in Malaysia


KUALA LUMPUR: GrabTaxi Holdings Pte Ltd, whose roots can be traced back to Malaysia, received a major boost in its challenge to keep up with the market share fight in the taxi booking mobile application market with a US$250mil (RM864mil) investment from Japan’s Softbank Corp.

The investment, which was made through SoftBank Internet and Media, Inc (SIMI), is the largest for GrabTaxi, which is known as MyTeksi in Malaysia.

It is also among the largest, if not the largest, Internet company in South-East Asia.

The company that provides the mobile taxi booking application was founded by Anthony Tan and Hooi Ling Tan, both Harvard Business School graduates, in 2011, according to a statement from the company.

Anthony is the grandson of Tan Sri Tan Yuet Foh, the co-founder of the Tan Chong group of companies.

MyTeksi currently serves 17 cities across six countries in South-East Asia, including Malaysia, the Philippines, Thailand, Singapore, Vietnam and Indonesia.

Through the strategic investment and partnership with MyTeksi, the SoftBank group aims to further build its presence in South-East Asia and maximise synergies with its network of Internet companies around the world.

Nikesh Arora, the vice-chairman of SoftBank Corp and chief executive officer of SIMI, said in a statement that in two years MyTeksi had become the dominant player in South-East Asia’s taxi booking mobile app industry, which is a testament to Anthony’s outstanding leadership.

“We look forward to working with his team and supporting MyTeksi’s further expansion in the region,” he said.

SIMI will become the largest investor in GrabTaxi, Anthony told Bloomberg in an interview in Bangkok yesterday, without providing stake details.

GrabTaxi has raised about US$340mil (RM1.18bil) in the last 14 months, it said in a statement. GrabTaxi’s funding comes as rival Uber is said to be close to raising a round of financing that would give it a valuation of as much as US$40bil (RM138bil).

Ride-hailing apps on smartphones are gaining popularity across the world by providing transportation alternatives, with the investment by SoftBank adding to the 1,300 made by the Tokyo-based technology company. “We will do whatever it takes to ensure that we maintain our leadership in an ethical and moral way,” Anthony was quoted by Bloomberg. “It’s a fight for market share. We’re many, many times bigger than our closest competitors and we intend to grow that fast.” GrabTaxi counts Singapore’s Temasek Holdings Pte Ltd and Alibaba Group Holding Ltd backer GGV Capital among its investors.

There were now 500,000 active users who used the app at least once a month, up six-fold from a year earlier, GrabTaxi said. It received about three taxi bookings every second across the region, the company said.

SoftBank, founded by Masayoshi Son in 1981, controls wireless carriers in Japan and the United States, as well as owning the largest stake in Alibaba Group Holding.

In October, the unit of SoftBank said it would lead an investment of US$210mil (RM726mil) in ANI Technologies Pvt, which offers a taxi booking service called Ola Cabs in India.

Uber has been attempting to gain a foothold in the region despite multiple regulatory tangles and already fierce competition.

Within South-East Asia, Uber is said to operate in the same six markets as GrabTaxi, after entering Singapore last year. It does not release operational statistics.

Malaysian and Indonesian authorities have said Uber services that utilise private vehicles are illegal, while Thai authorities last week indicated that they are also banning the service.

Other major taxi apps in South-East Asia include Indonesia’s Blue Bird, regional player EasyTaxi, backed by German start-up incubator Rocket Internet, as well as London-based Hailo, which operates in Singapore.

Taxi-hailing apps have become popular in South-East Asia, especially Singapore, one of the most expensive places in the world to own a private car.

Finding a cab during peak hours and during frequent tropical downpours can be difficult in the city-state, which last month said it planned to start regulating third-party taxi booking services for the first time.

Heavy traffic in cities such as Manila and Jakarta also makes finding taxis tough.

Those troubles are benefiting apps such as GrabTaxi. The apps are seen as revolutionising the taxi industry, which has long been plagued by inefficient cartels and price-gouging drivers.

Source: The Star/Asia News Network

Related posts:

Endeavouring to give back to startups - part 8 

Startup's components of a support system, govt incentives, market access - part 5,6,7


Endeavouring to give back to startups - part 8

Successful entrepreneurs join forces to fund and support businesses

Malaysia has seen quite a number of successful entrepreneurs coming into the market over the last two decades or so. They have established strong businesses and built up significant wealth and experience.

While any normal person would likely retire and enjoy the fruits of their labour, entrepreneurs have a knack for staying in their jobs.

Not only do they move on to bigger ventures, they also relish the opportunity to invest in other passionate entrepreneurs who have ambitious visions.

Many of these early entrepreneurs have come full circle.

They recall their early days of struggle to get their ideas off the ground, their first successful rounds of funding and remembering how they persevered to grow their startups to become successful companies.

Most of them understand the importance of giving back to the ecosystem.

Angel investors are valuable to the ecosystem not just because they have capital to back startups, but also other experiences that will help to nurture budding entrepreneurs.

sssssss: Afzal Abdul Rahim, Chief Executive Officer - TIME dotComBerhadSome of these entrepreneurs, including Time dotCom Bhd chief executive officer Afzal Abdul Rahim (left picture), Terato Tech founder Reza Fahmi Razali and JobStreet Corp Bhd founder Mark Chang.

After establishing their businesses, they remain actively involved in investing in other people.

Afzal started his entrepreneurial journey in 2006 after he and his partner successfully raised RM20mil to execute a management buyout of AIMS Group.

In 2008, he took over Time and grew it from a penny stock company to a formidable telco solutions provider.

But Afzal is far from done.

Today, he is an active angel investor and currently leads Endeavour Malaysia, the local affiliate of the global non-profit organisation Endeavour.

Under Endeavour Malaysia, Afzal, along with the other board members and partners, provide funds, mentorship and access to networks to help startups scale up and expand.

“As an entrepreneur, I know how important mentorship can be,” Afzal said at the launch of Endeavour Malaysia.

He added that the mentoring network of Endeavour would provide valuable support to Malaysia’s next generation of high-impact entrepreneurs.

Likewise, UnrealMind Interactive Bhd founder Tan Swee Yong sees much value in providing support to the new wave of up-and-coming entrepreneurs.

“I enjoy a startup environment more than a corporate environment. There are plenty of ideas and talent out there.

“It is all about giving them a helping hand,” Tan had said in an earlier interview.

Tan started UnrealMind, a mobile content company, in 2001 with a personal investment of RM300,000.

The company grew regionally, was listed and subsequently privatised by a British company in 2005.

Not one to sit on his profits, Tan has been actively looking out for other startups to invest in and participated in events such as Echelon Malaysia.

Like other angel investors, Tan believes in investing more than just finances into his investee companies and takes an active role in guiding them as well.

There are many other entrepreneurs who are willing to grow other startups.

And most of them are accessible through various angel investor networks, including Malaysian Business Angels Network (MBAN) and through organisations such as MaGiC.

It takes every party to keep the investment and nurturing cycle going in order to establish a strong startup ecosystem.

And successful entrepreneurs who have come full circle certainly have a lot to offer in terms of guiding new startups to greater heights.

This is the eighth instalment of MetroBiz’s tie-up with Malaysian Global Innovation and Creativity Centre (MaGIC) to explore startup ecosystems.

By Joy Lee The Star/Asia News Network

Related posts:

 Startup's components of a support system, govt incentives, market access - part 5,6,7

OOI Boon Sheng, founder and chief executive officer of Web Bytes Sdn Bhd, was fortunate to have found a good
Brewi

Wednesday 26 November 2014

Startup's components of a support system, govt incentives, market access - part 5, 6, 7

How components of a support system nurture nascent companies - part 5

Geared up: A participants in the 1337 Accelerator programme demonstrating a gaming app, Agent RX — a single player top down stealth game. The app can be used on a desktop and be enhanced with the Oculus.

Difference between Accelerator and Incubators: Infographic:  https://infogr.am/infographic-79580 via @infogram

Over the course of grooming startups, the industry has perhaps grown familiar with the terms “incubator” and more recently, “accelerator”.

These organisations, part of the modern support system for new entrepreneurs, have helped startups take shape in their early stages.

In almost all cases, participation in an incubator or accelerator programme has enabled entrepreneurs gain access to resources beyond their own to scale their business. Services such as regulatory and strategic expertise that otherwise may not be available to independent startups become more readily available.

And because of their seemingly similar functions and involvement with early-stage startups, incubators and accelerators are often mistaken to mean the same thing. But they are not.

An incubator is essentially a physical work space that hosts a new business with many other startup companies. Startups are usually allowed to stay in the space as long as they need to and mentorship is typically provided by the incubator or through peers at the facility.

An accelerator programme, on the other hand, is limited to a three- to four-month period intended to accelerate a startups’ business and the kick them out of the nest. Accelerators often make investments in the companies they support and provide a strong network of mentorship. These programmes typically culminate in a “pitch day” for startups to raise more funds from venture capitals.

In Malaysia, both private and government funded incubators have been set up in the Klang Valley over the past few years as the government pushes for the growth of more local entrepreneurs and startups.

But it may come as a surprise to some that there is only one proper accelerator model in Malaysia, known as 1337 Accelerator.

1337, pronounced “leet”, started in March last year with an initial government funding of RM5mil to invest in startups. The programme has two intakes a year where budding tech-entrepreneurs are given the opportunity to join the programme to develop their ideas and take them to market.

“We invest in the best minds in the country. The teams here have to earn their way into the programme. They have to go through a stringent panel to see if they have an investor-worthy idea and can contribute back to the ecosystem,” said Bikesh Lakhmichand, chief executive officer of 1337 Ventures Sdn Bhd.

He explained that accelerators are more mentor-driven and are directly involved with the development of the startup.

According to Bikesh, accelerators are the way of the future for startups, noting that the trend is growing globally to create a more vibrant startup community.

However, incubators, too, have their appeal.

As incubators do not invest in startups, entrepreneurs are able to maintain full ownership and control of their companies while tapping onto facilities provided by the incubators.

Among incubators in Malaysia, many would probably be familiar with Technology Park Malaysia (TPM) and MAD Incubator.

TPM spans some 650 acres of land in Bukit Jalil with total lettable business and incubation space of 725,000sq ft.

Its president and chief executive officer Datuk Mohd Azman Shahidin said the number of companies at TPM has grown to more than 200.

Companies that have been selected for TPM’s incubation programme will be guided through a hand-holding and business coaching programme over a duration of six to 18 months. Here, they will be equipped with knowledge on product development, marketing techniques, R&D and networking.

“Our main role is to accelerate the growth of small businesses. We are here to grow and be the catalyst for these companies. And we have seen some companies here that have grown to become listed companies,” Azman said.

MAD Incubator has also seen good traction with its facilities and had launched its third incubator in Malaysia in the middle of the year.

While different in nature, both incubators and accelerators play an important role in boosting early-stage venture. One model may not necessarily be better than the other. But interested startups should be clear on what they want out of these supporters to get the best out of these facilities

Govt incentives for startups - part 6

Ample opportunity: Malaysia provides many initiatives to fund startups. Recently Axiata Group Bhd launched Axiata Digital Innovation Fund, a RM100mil venture capital fund, with Malaysia Venture Capital Management Bhd (Mavcap). Its group president and group chief executive officer Datuk Seri Jamaludin Ibrahim (right) is seen here exchanging document with Mavcap chief executive officer Jamaludin Bujang (left). Looking on are Khazanah Nasional Bhd managing director Tan Sri Azman Mokhtar and Prime Minister Datuk Seri Mohd Najib Tun Abdul Razak.

Silicon Valley has long been known as a hub for high-tech innovation. The southern part of the Bay Area is home to many of the world’s largest companies and thousands of startups including Facebook, Google and eBay.

But Silicon Valley was not an overnight success story. It took decades of government funding and support to make it the vibrant tech cluster it is today.

Policymakers play an important role in supporting the growth of a startup ecosystem. Be it in funding research and technologies or in building infrastructure, government help create ideal conditions for innovation and commercialisation.

In Malaysia, the government has announced various initiatives, including financial allocations, over the years to groom entrepreneurship and support the startup ecosystem.

In the Budget 2015 speech, the Prime Minister noted the government’s aspiration to position Malaysia as a choice location for startups in the region.

And among its efforts to achieve this target is the establishment of Malaysian Global Innovation & Creative Centre (MaGIC) to create a more conducive ecosystem for startups.

Financial assistance

One of the most crucial ingredients for the development of startups is funding and several government agencies have been established to dispense pre-seed and seed funding to enable startups to transform ideas into commercially viable products and ventures.

These agencies include not-for-profit organisation Cradle Fund Sdn Bhd and venture capital company Malaysia Venture Capital Management Bhd (MAVCAP), both under the purview of the Finance Ministry.

As a VC, Mavcap makes direct investments with fund size ranging from RM1mil to RM20mil and participates actively in the management and operations of these companies.

Mavcap also invests through its Outsource Partners Programmes, whereby it allocates capital to other VC fund management companies to invest in high-growth businesses.

Cradle offers a maximum seed funding of up to RM500,000 to help technology companies attain commercialisation.

Tax incentives

The government has also introduced tax breaks to encourage private investments in startups as well as promote the setting up of high-tech companies in Malaysia.

For example, the Angel Tax Incentive allows angel investors who have invested in early-stage startups to qualify for tax exemption. This would indirectly see more fund flows to startups and also encourage eligible angels to participate in the ecosystem.

There are incentives for ventures that have obtained MSC Status including a 100% investment tax allowance and duty-free importation of multimedia equipment.

Building skills

Various programmes have also been initiated to build entrepreneurial and technical skills as well as encourage interest among the local community to venture into the startup scene.

MaGIC recently launched its partnership with Stanford University, which, among its programmes, would send entrepreneurs to Silicon Valley for a two-week immersion programme.

The partnership will also see an exchange programme whereby local entrepreneurs will be able to learn from the Stamford faculty on marketing and commercialising their ideas.

Another significant component of the partnership is the “Faculty Train Faculty” Programme where faculty members from 14 local universities will be sent to Stanford over the next three years to help them develop impactful and creative entrepreneurship programs in their respective universities.

Early this year, MDeC announced its MSC Malaysia Startup Accelerator Lite programme to help early-stage ICT startups map out and accelerate their goals.

MDeC is also working with partners such as JFDI Asia, a regional startup accelerator, to help mature and globalise the local startup community.

Government agencies are actively seeking partnerships with startup communities and small and medium companies in other countries to provide local startups with an opportunity to learn from and potentially partner with startups abroad as well as explore other markets.

Market access can be as important as funding for startups - part 7

Sealing the deal: Prime Minister Datuk Seri Najib Tun Razak with Malaysia Venture Capital Management Bhd Ceo Jamaludin Bujang (left) and Axiata chief executive officer Datuk Seri Jamaludin Ibrahim at the event announcing the RM100mil Axiata Digital Innovation Fund recently. The fund will focus on helping startups gain access to markets. — Bernamapic

BEYOND just starting a business, a startup company’s main purpose for being is to offer a product or innovation that addresses a problem.

As one investor puts it, a truly innovative product will solve a customer’s problem that has not been solved before.

But one of the challenges of introducing a new product or innovation is that it has not been tried or tested. Naturally, the market may be slow in embracing such an innovation.

Additionally, startups rarely have the capacity or network to tap into new markets to bring their products out.

As such, investing partners, with their strong networks and deep pockets, play an important role in the startup ecosystem by providing the kind of market access needed by startups to reach potential customers.

Corporations, investors and even the government are increasingly recognising this need and are providing platforms for startups to tap into, beyond just early and growth-stage funding.

For example, early last year, Telekom Malaysia, the Multimedia Development Corporation and StartupMalaysia.org collaborated on an accelerator programme focusing on getting startups to market quickly.

More recently, telco giant Axiata Group Bhd and Malaysia Venture Capital Management Bhd (Mavcap) recently signed an agreement to establish a RM100mil venture capital fund, the Axiata Digital Innovation Fund (ADIF), to help companies with innovative products in the digital-services space markettheir offerings.

ADIF will focus on revenue-generating companies that may still require support to grow in terms of funding, know-how and market access.

Axiata noted that digital-services entrepreneurs will have unprecedented access to regional partnership opportunities among other things, thanks to its extensive market reach of over 13 million customers in Malaysia and over 250 million across Asia.

Given Axiata’s many years of operations in the region, these startups are also able to leverage the telco’s in-depth knowledge of the regional market.

Likewise, Alliance Bank’s SME Innovation Challenge 2014 programme provides participating startups with an opportunity to be coached by corporate titans, a platform to network through, and access to markets.

When new products are launched, startups and their investors concentrate the bulk of their initial efforts on educating the market about what the products offer.

But entrepreneurs understand that having an innovation with little visibility and access to markets does no good.

Startups are now seeing the need for opportunities to tap into existing networks and markets, coaching, exposure and resources, offered by incubation and accelerator programmes.

In other markets where the startup ecosystems are more mature, the private sector and governments have introduced programmes to tackle market-access issues for startups.

These include the US Market Validation Program run by Silicon Valley-based tech accelerator, US Market Access Center, and the Market Access Grant administered by the Irish government to incentivise companies to develop viable and sustainable market entry strategies for new products and markets.

While such efforts have yet to become well established here, different players in the local ecosystem are becoming more aware of the need to provide startups with market access to ensure better chances of success.

By Joy Lee The Star/Asia News Network

■ This is the seventh instalment of MetroBiz’s tie-up with Malaysian Global Innovation and Creativity Centre (MaGIC) to explore startup ecosystems.

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