Cradle Fund Sdn Bhd (Cradle) announced to join forces with four more co-investment partners following its first co-investment partnership with Singapore-based seed fund provider, Golden Gate Ventures Pte Ltd (GGV) last June.
Cradle signed a co-investing agreement with four new partners – Fatfish Ventures Sdn Bhd, OSK Ventures International Bhd, CoEnt Venture Partners Pte Ltd and Crystal Horse Investments Pte Ltd. – to fund Malaysian technology-based startups.
The partners will take part in a one-to-one equity co-investment exercise, investing up to RM500,000 (approximately SG$193,348) each. For the first time, Cradle will also be taking equity in the companies invested.
The agreement is collectively worth RM11.5mil and is the largest co-investment agreement Cradle has signed thus far.
“We are elated to bring four new partners on-board. This co-investment partnership takes our relationships to a whole new level. Being seasoned investors, our new partners will also give us additional insights and experience in investing in start-ups which Cradle may not currently have,” Nazrin Hassan, Cradle's CEO said.
Cradle signed a co-investing agreement with four new partners – Fatfish Ventures Sdn Bhd, OSK Ventures International Bhd, CoEnt Venture Partners Pte Ltd and Crystal Horse Investments Pte Ltd. – to fund Malaysian technology-based startups.
Nazrin also sees Cradle’s expansion into co-investment as one of the steps for attracting foreign investors, especially venture capitalists and angel groups, to invest in technology business deals in Malaysia.
"This will be an added advantage for our entrepreneurs who are seeking to raise further funds to support their business growth as they will not have to venture across Malaysian shores to seek for investors. It is also hoped that with a larger pool of discerning foreign investors, it will encourage our Malaysian entrepreneurs to be more global in their approach and market access," he said.
According to Nazrin, the co-investment partnership is also done in preparation for the gradual reduction of government grants towards supporting early stage start-ups. "This is one way Cradle can continue supporting highly talented technology entrepreneurs realise their dreams for success."
Cradle plans to channel 70 percent of its funding allocation to co-investing initiatives by 2017.
Partners are also looking forward to a fruitful relationship with Cradle, describing it as a positive move for the industry. Calling it a watershed moment for the early stage funding scene in Malaysia, Fatfish CEO, Lau Kin Wai said it would like to work closely with Cradle to tap into their strength.
"It is extremely encouraging to see Government-linked company like Cradle to initiate such strategic partnerships and bring value to the ecosystem," he said.
Patrick Yee, COO and Executive Director of OSK Ventures International said, the Malaysian technology startup scene has been growing from strength to strength thanks to an ecosystem that enables budding entrepreneurs to obtain funding and create companies that spur economic growth for the country.
"This is a cycle that is important to ensure a long-term sustainable growth and this co-investment agreement creates a platform for us to identify, invest and solidify the development of start-ups. Working together with Cradle will help accelerate the process and contribute to the advancement of investee companies and catalyse further developments in the industry,” Yee said.
Hideki Fujita, co-founder of Singapore-based CoEnt said it is happy to be working with Cradle to fund promising companies.
"We hope that by working together with Cradle, we can help more Malaysian companies bring their innovations to the global arena," he said.
Another Singapore-based partner, Crystal Horse, views the partnership as extension of its existing relationship with Cradle and co-investing with a knowledgeable partner will be of huge benefit to itself and Cradle.
"We have always been able to work smoothly with Cradle. It has great knowledgeable people that help nurture entrepreneurs in Malaysia as well as where promising start-ups operate. We can see this as something we can leverage on," he said.
In its 10-year history, Cradle has funded almost 700 Malaysian technology startups through its CIP Catalyst product development grant and its CIP500 product commercialisation grant.
Funded companies include taxi booking mobile application, MyTeksi, financial planning website, Intelligent Money, infographic design web tool, Piktochart and hypoglycaemic-shock alert bracelet, Hypoband. It also has a commercialisation rate of 58 percent, deemed to be the highest among all government grant agencies.
