bodyType

customContents

entityId

printArticlePageQuery

filter

article

body

urlAlias

articleSectionsContent

articleSeoArticle

articleSourceHeaderArticle

contentSchemaRenderContent

contentSubHeadlineContent

contentHeadlineContent

mainImagePrintArticleArticle

authorBlockPrintArticleArticle

contentSponsorTagContent

articlePianoPaywallContent

scmpYoutubeContent

hooksTrackPageViewArticle

query printArticlePageQuery(
  $entityId: String!
  $customContents: [CustomContentInput]
  $bodyType: BodyFormatTypeEnum
) {
  article(filter: {entityId: $entityId}) {
    entityId
    body(customContents: $customContents, type: $bodyType) {
      json
    }
    urlAlias
    ...articleSectionsContent
    ...articleSeoArticle_3o8td4
    ...articleSourceHeaderArticle
    ...contentSchemaRenderContent
    ...contentSubHeadlineContent
    ...contentHeadlineContent
    ...mainImagePrintArticleArticle
    ...authorBlockPrintArticleArticle
    ...contentSponsorTagContent
    ...articlePianoPaywallContent
    ...scmpYoutubeContent
    ...hooksTrackPageViewArticle
    id
  }
}

fragment articlePianoPaywallContent on Content {
  __isContent: __typename
  ...hooksPaywallPromiseContent
}

fragment articleSectionsContent on Content {
  __isContent: __typename
  sections {
    value {
      ...helpersCheckIfNewsSectionInFirstIndexSection
      ...entityLink
      name
      id
    }
  }
}

fragment articleSeoArticle_3o8td4 on Article {
  ...hooksArticleSeoArticle
  ...helpersCheckIsPostiesArticle
  ...helpersGetArticleTypeArticle
  entityId
  publishedDate
  updatedDate
  summary {
    text
  }
  subHeadline {
    text
  }
  body(customContents: $customContents, type: $bodyType) {
    text
  }
  keywords
  sections {
    value {
      name
      id
    }
  }
  topics {
    name
    entityId
    id
  }
  urlAlias
  authors {
    name
    id
  }
  images {
    style(filter: {style: "768x768"}) {
      url
    }
  }
  readingTime
}

fragment articleSourceHeaderArticle on Article {
  urlAlias
  ...entityLink
}

fragment authorBlockPrintArticleArticle on Article {
  ...defaultArticleDateContent
  ...authorNamesArticle
}

fragment authorNameAuthor on Author {
  ...entityLink
  name
  entityUuid
}

fragment authorNamesArticle on Article {
  authorLocations
  authors {
    entityId
    location
    ...authorNameAuthor
    id
  }
}

fragment blockquoteQuoteContent on Content {
  __isContent: __typename
  ...contentShareWidgetContent
}

fragment checkersCheckContentContainsStarlingImageContent on Content {
  __isContent: __typename
  topics {
    entityId
    id
  }
}

fragment contentHeadlineContent on Content {
  __isContent: __typename
  headline
  socialHeadline
  ...contentHeadlineTagContent
  ...helpersUseContentSponsorContent
}

fragment contentHeadlineTagContent on Content {
  __isContent: __typename
  ...hooksContentHeadlineTagContent
}

fragment contentNewsletterWidgetContent on Content {
  __isContent: __typename
  topics {
    relatedNewsletters {
      ...helpersMassageToNewsletterItemNewsletter
      id
    }
    id
  }
  sections {
    value {
      relatedNewsletters {
        ...helpersMassageToNewsletterItemNewsletter
        id
      }
      id
    }
  }
  ... on Article {
    relatedNewsletters {
      ...helpersMassageToNewsletterItemNewsletter
      id
    }
  }
}

fragment contentSchemaRenderContent on Content {
  __isContent: __typename
  ...blockquoteQuoteContent
  ...imageContent
  ...inlineWidgetContent
  ...photoGalleryWidgetContent
  ...scmpYoutubeContent
}

fragment contentShareWidgetContent on Content {
  __isContent: __typename
  entityId
  urlAlias
  shortUrl
  socialHeadline
  headline
}

fragment contentSponsorTagContent on Content {
  __isContent: __typename
  ...helpersUseContentSponsorContent
}

fragment contentSubHeadlineContent on Content {
  __isContent: __typename
  subHeadline {
    json
  }
  summary {
    json
  }
  ...contentSchemaRenderContent
}

fragment defaultArticleDateContent on Content {
  __isContent: __typename
  ...hooksArticleDateUtilsContent
}

fragment entityLink on BaseWithApplicationAndUrlAlias {
  __isBaseWithApplicationAndUrlAlias: __typename
  __typename
  entityId
  entityUuid
  urlAlias
  urlRedirect {
    toUrl
    id
  }
  application {
    entityId
    id
  }
  ... on Section {
    fullSectionPath {
      entityId
      id
    }
    parentSection
  }
  ...helpersAppBarVariantBase
  ...helpersApplicationBase
  ...helpersCheckIsPlusArticle
  ...helpersStyleSectionContent
}

fragment helpersAppBarVariantBase on BaseWithApplicationAndUrlAlias {
  __isBaseWithApplicationAndUrlAlias: __typename
  ...helpersCheckIsLiveArticle
  ...helpersCheckIsPlusPage
  ...helpersCheckIsPostiesArticle
  ...helpersCheckIsPostiesPage
  ...helpersCheckIsPostMagazineArticle
  ...helpersCheckIsStyleArticle
  ...helpersSectionContent
  ...helpersStyleSectionContent
}

fragment helpersApplicationBase on BaseWithApplicationAndUrlAlias {
  __isBaseWithApplicationAndUrlAlias: __typename
  ...helpersCheckIsPostiesArticle
  ...helpersCheckIsPostiesPage
  ...helpersCheckIsPlusPage
}

fragment helpersCheckIfNewsSectionInFirstIndexSection on Section {
  name
}

fragment helpersCheckIsAmpEnabledArticle on Article {
  entityId
  types {
    value {
      entityId
      id
    }
  }
  sections {
    value {
      entityId
      id
    }
  }
  topics {
    sponsor {
      entityId
      id
    }
    id
  }
  disableOffPlatformContent
  sponsorType
  published
  ...helpersCheckIsPlusArticle
  ...helpersCheckIsPostiesArticle
}

fragment helpersCheckIsLiveArticle on Article {
  flattenTypeIds
  liveArticle {
    status
    id
  }
}

fragment helpersCheckIsMainTopicContent on Content {
  __isContent: __typename
  topics {
    entityId
    id
  }
}

fragment helpersCheckIsPlusArticle on Content {
  __isContent: __typename
  ... on Article {
    paywallTypes {
      entityUuid
      id
    }
  }
}

fragment helpersCheckIsPlusPage on Page {
  urlAlias
}

fragment helpersCheckIsPostMagazineArticle on Article {
  sections {
    value {
      entityId
      id
    }
  }
}

fragment helpersCheckIsPostiesArticle on Article {
  sections {
    value {
      entityId
      id
    }
  }
}

fragment helpersCheckIsPostiesPage on Page {
  urlAlias
}

fragment helpersCheckIsStyleArticle on Content {
  __isContent: __typename
  sections {
    value {
      entityId
      id
    }
  }
}

fragment helpersGetArticleTypeArticle on Content {
  __isContent: __typename
  ... on Article {
    types {
      value {
        entityId
        id
      }
    }
  }
}

fragment helpersMassageToNewsletterItemNewsletter on Newsletter {
  entityId
  name
  alternativeName
  description {
    text
  }
  summary {
    text
  }
  homepageDescription {
    text
  }
}

fragment helpersSanitizeArticleTypeEntityIdsArticle on Article {
  types {
    value {
      entityId
      id
    }
  }
}

fragment helpersSanitizeAuthorTypesArticle on Article {
  authors {
    types
    id
  }
}

fragment helpersSanitizedAuthorEntityIdsArticle on Article {
  authors {
    entityId
    id
  }
}

fragment helpersSectionContent on Section {
  fullSectionPath {
    entityId
    id
  }
}

fragment helpersStyleSectionContent on Section {
  fullSectionPath {
    entityId
    id
  }
}

fragment helpersUseContentSponsorContent on Content {
  __isContent: __typename
  topics {
    entityId
    sponsor {
      ...sponsorTagSponsor
      name
      type
      id
    }
    id
  }
  ... on Article {
    sponsorType
  }
  ...helpersCheckIsMainTopicContent
}

fragment hooksArticleDateUtilsContent on Content {
  __isContent: __typename
  createdDate
  publishedDate
  updatedDate
}

fragment hooksArticleSeoArticle on Article {
  ...helpersCheckIsPostiesArticle
  ...helpersCheckIsPostMagazineArticle
  ...helpersCheckIsStyleArticle
  ...hooksContentHeadlineTagContent
  ...helpersCheckIsAmpEnabledArticle
  entityId
  headline
  socialHeadline
  types {
    value {
      entityId
      id
    }
  }
  authors {
    entityId
    id
  }
  images {
    generic_og: style(filter: {style: "og_image_scmp_generic"}) {
      url
    }
    styles(filter: {styles: ["og_image_posties_article", "og_postmag", "og_image_style", "og_image_scmp_analysis", "og_image_scmp_explainer", "og_image_scmp_editorial", "og_image_scmp_fact_check", "og_image_scmp_debate", "og_image_scmp_live", "og_image_scmp_obituary", "og_image_scmp_opinion", "og_image_scmp_review", "og_image_scmp_series", "og_image_scmp_generic"]}) {
      url
      style
    }
    type
  }
  urlAlias
}

fragment hooksContentHeadlineTagContent on Content {
  __isContent: __typename
  __typename
  ... on Article {
    types {
      value {
        name
        entityId
        description {
          text
        }
        id
      }
    }
    ...helpersCheckIsStyleArticle
  }
  flag
  sections {
    value {
      name
      id
    }
  }
  ...hooksContentHelperContent
}

fragment hooksContentHelperContent on Content {
  __isContent: __typename
  ...helpersSanitizeArticleTypeEntityIdsArticle
  ...helpersSanitizeAuthorTypesArticle
  ...helpersSanitizedAuthorEntityIdsArticle
  flag
}

fragment hooksPaywallPromiseContent on Content {
  __isContent: __typename
  entityId
  ...helpersCheckIsPostiesArticle
}

fragment hooksTrackPageViewArticle on Article {
  entityId
  publishedDate
  headline
  sections {
    value {
      name
      id
    }
  }
  urlAlias
  authors {
    name
    id
  }
  entityUuid
}

fragment imageContent on Content {
  __isContent: __typename
  headline
  ...checkersCheckContentContainsStarlingImageContent
}

fragment inlineWidgetContent on Content {
  __isContent: __typename
  ...contentNewsletterWidgetContent
}

fragment mainImagePrintArticleArticle on Article {
  images {
    title
    url
    isSlideshow
    size_652x446: style(filter: {style: "652x446"}) {
      url
    }
  }
}

fragment photoGalleryDialogContent on Content {
  __isContent: __typename
  __typename
  ...contentShareWidgetContent
}

fragment photoGalleryWidgetContent on Content {
  __isContent: __typename
  ...photoGalleryDialogContent
}

fragment scmpYoutubeContent on Content {
  __isContent: __typename
  entityId
  urlAlias
  publishedDate
}

fragment sponsorTagSponsor on Sponsor {
  name
  type
  images {
    url
  }
}


sections

types

topics

disableOffPlatformContent

sponsorType

published

headline

socialHeadline

authors

images

publishedDate

updatedDate

summary

subHeadline

keywords

readingTime

authorLocations

entityUuid

Tashny Sukumaran

As Vietnam, Indonesia and Singapore – the big boys of Southeast Asia’s start-up scene – jostle to be crowned the region’s undisputed hub for the sector, the movers and shakers of the industry in Malaysia are asking: do we even want to be in that tussle, and are we too far behind?
Malaysian government officials involved in promoting start-ups, along with private equity players and even local start-up founders, say the best way to play catch-up and make up for lost time would be to attract more capital and become a venture capital (VC) hive.
The insiders say that while it would be ideal for Malaysia to be the birthplace of the next generation of Southeast Asia’s mega tech companies, such as Grab or Tokopedia, there is equal – if not more – opportunity in being the country that substantially owns the fastest-growing start-ups.
If Malaysia-based capital becomes more involved in the scene, there could be dividends at home, giving the country more leverage to persuade these companies to set up operations within its shores and employ and train locals – a multiplier effect for both capital and jobs, say industry players.
And while Malaysia’s investment scene has long been staid – partly due to endemic risk aversion in a nation home to large pension and sovereign wealth funds that need steady returns – there is a consensus among young local players that Malaysia can, with the right political will, make this dream happen and tap into the surging value of Southeast Asia’s internet economy.

A report released this week said the sector was worth an eye-watering US$100 billion, and is only set to grow.
One reason for cautious optimism in Malaysia is the government’s dramatic overhaul of how it involves itself in the VC scene, promising to put in place initiatives it hopes will invigorate the sector.
Just ask Yeo Bee Yin, the charismatic technocrat who leads the ministry in charge of energy, science, technology, environment and climate change (Mestecc) in Prime Minister Mahathir Mohamad’s administration.
How Chinese money is driving Southeast Asia’s tech start-up scene
Chief among her plans is a 2 billion ringgit (US$476 million) war chest of state money which will be used for grants that match private capital injections. The government will encourage local and overseas VC firms to finance regional start-ups by implementing a “fund of funds” model – a pooled investment fund that invests in other types of funds – to push for greater participation of private cash in everything from green tech to fintech, especially from smaller investment funds.
First mooted late last year, the initiative also includes a substantive upgrade in tax incentives for private companies or even individuals who invest up to 20 million ringgit in private VC firms. “Previously we did not have a strong regulatory framework, incentives or an ecosystem that attracted enough private VCs to invest in Malaysia,” Yeo said in an interview last month.

Her administration took office from the government of now-deposed prime minister Najib Razak, which had saddled the country with massive debt and was engulfed with corruption allegations.
“But now we will go into the fund for funds model, funding VCs who will find and fund start-ups. We will let the private sector do it and then leverage off their network and expertise to build our entrepreneurs,” Yeo said. She added that part of the government’s push to level up the VC scene included the privatisation of two of five government funds under her ministry.
Kumpulan Modal Perdana will undergo privatisation of its equity management division, which will then operate with the equity arms of other agencies under the Fund of Funds model. Other grant programmes and units will be consolidated with Cradle, making it the sole grant manager for tech funding. Malaysian Venture Capital Management (Mavcap), and Malaysia Debt Ventures (MDV), meanwhile, will oversee early-stage funding, venture capital and venture lending, supporting emerging firms with high growth potential and high risk.
How the death of Nazrin Hassan shook up Malaysian start-up scene
Co-investing with private and international VC firms would allow the government to streamline the process while also focusing on attracting private funds – fresh signs that it is serious about reviving an old cooperative policy labelled Malaysia Inc, a symbiotic industrial strategy to enhance public-private partnerships.
Yeo said the government’s VC initiatives would allow Malaysia to focus on nurturing a start-up ecosystem in a region where such firms are fast blossoming, rather than scrambling to select profitable start-ups: something she admits the government “is not good at”. Mestecc data shows that, on average, Mavcap sees a return of 65 cents for each dollar in the first round of direct investments.
But these initiatives were not “free money”, Yeo said. “There will be strings attached, especially for international VCs – if not, there will be no loyalty. However, the scene in Malaysia is not limited to local start-ups because talent can come from anywhere and we don’t want to lose out to other countries. We will open up for foreign talent, but there will be some requirements on local ownership. But saying no to all foreign talent will bring no meaning as we will lose out to many countries. We must attract them to Malaysia, build an ecosystem, let them hire, operate and grow here.”

The government will also scale up funding for research and development, streamlining the start-up process while thinking of new ways to attract more private funds.
Although Malaysia’s internet economy, valued at US$5 billion this year, continues to grow at a steady 20 to 30 per cent annually, neighbours Singapore, the Philippines and Thailand are matching this pace, while Indonesia and Vietnam “lead the pack with growth rates in excess of 40 per cent a year”, according to the e-Conomy SEA report released by Google and Singapore state investment firm Temasek Holdings this week.
Singapore remains a main funding gateway and the home of the region’s first “decacorn” – Malaysia-founded, Singapore-based transportation, delivery and digital payments giant Grab Holdings, which is valued at US$14 billion. A decacorn is a company valued at more than US$10 billion.
Meanwhile in Malaysia, funds are experiencing a slowdown, with US$140 million raised in the first half of this year, falling short of 2018 levels – possibly attributable to its lack of home-grown unicorns.

And while Mestecc intends to “hit the ground running”, local industry players caution against an overreliance on international VC firms and point to a history of Malaysian start-ups moving their headquarters to a different country after meeting medium-term investment goals and profit objectives. One example often cited is ride-hailing firm Grab. Its Malaysian founders in 2014 moved the company’s headquarters to neighbouring Singapore – the home of Vertex Ventures, the VC firm which was one of its main early backers.
Raja Hamzah Abidin, managing partner of Malaysia-based multifamily VC firm RHL Ventures, said Malaysia in the past decade had been a “leading place” for tech exits – where investors are able to extract returns from their investment in start-ups through buyouts or public listings. But now, Malaysia was playing “second fiddle” to its neighbours, said Hamzah, whose firm invests in early- and growth-stage Southeast Asian start-ups.
How Southeast Asia’s start-up exit environment is maturing with tech in the vanguard
“If you analyse tech companies in Southeast Asia with valuations of above US$100 million, Malaysia lags behind … relative to our peers Indonesia, Singapore, Vietnam and even Thailand in terms of the number of companies,” he said.
And start-ups that decide to stay, such as used-car trading platform Carsome, are frank about the funding issues they face.
“Capital injection is the easiest way to help, and that’s what is lacking right now,” said founder and chief executive Eric Cheng, whose team has expanded Carsome into Singapore, Indonesia and Thailand, making it the region’s largest used-car trader. “We are at the growth stage, so it’s all about scalability, which comes with costs – but it seems like government VCs focus on pre-seed and seed start-ups, which leaves a funding gap in growing start-ups,” he said.

“Singapore has all the money right now, so that’s obviously a better place to be as it’s more investor friendly. In Malaysia, in terms of really supporting the growth of a company, we don’t see that as much, and I hope it can be better as there are a lot of quality start-ups, and as Malaysians many of us would prefer to stay.”
There will be strings attached, especially for international VCs – if not, there will be no loyalty
Yeo Bee Yin, tech minister
Remaining in Malaysia also allowed for lower operational costs, said Yeoh Chen Chow, co-founder of discount and discovery app Fave, which has received federal government assistance in the form of tax incentives, recruitment support, and the backing of a government-linked investment company.
The local start-up scene was growing by leaps and bounds, said Yeoh, although some gaps needed to be filled for the country to reach its potential.
He said a greater level of promotion of local entrepreneurs and further investment in local tech and data-science talent were critical steps needed for the sector to level up.
Malaysian start-ups must also think regionally from the start, said Jamaludin Bujang, managing director of regional VC firm Gobi Partners. “Look at Singapore: because of their size they naturally began to enter the foreign market from the get-go. In Malaysia, people can get comfortable as it’s a nice-sized market. There must be more drive to go out from the very beginning.”

Local VC firms must also look to regional expansion to become truly competitive, said Mavcap’s acting CEO Shahril Anas, while bureaucratic mindsets had to shift from favouring traditional investments to considering innovative projects with high growth potential.
“The [Singapore] government is friendly to tech firms and ready to spend. Our biggest issue is firepower – capital. The 2 billion ringgit promised is a good start, but where is this capital coming from, and when? The new government has repeatedly said it is short on funds.”
Insiders meanwhile say the prevalence of pre-seed funds and grants for start-ups in Malaysia may be stifling the sector instead of giving it a shot in the arm. Under these schemes, funds are disbursed to start-ups while they are still testing products and services, and well before they have a revenue track record.
A common gripe of investors is that start-up founders are abusing these schemes by applying for funding from multiple agencies and then not delivering returns.
How a wave of Chinese money is powering Indian start-ups
These “grantpreneurs”, said minister Yeo, were why agencies such as Malaysia-based seed financier Cradle Fund had resolved to limit their early-stage funding to “only the very competitive”.
And while Malaysia’s new VC model may help it attract funders and start-ups, local VC fund managers say the talent retention problems will persist if the domestic ecosystem is not nurtured.
“A vibrant ecosystem contains both local players and foreign players,” said Hamzah from RHL Ventures. “Local VCs tend to have the deepest networks and best local reach, and thus are better equipped to identify earlier-stage opportunities compared to foreign players. Foreign VCs then can come in to assist with larger tickets and global or regional expansion. But without a strong local VC base, there’ll be haphazard and insufficient support for early-stage founders raising capital.”
He pointed out that Malaysia was home to fewer than 10 active private VC firms, compared with more than 30 in Indonesia and Singapore.

Among his recommendations is a structured programme for a period of five to 10 years to fund local VC outfits to level the playing field with foreign firms.
Efforts to grow the angel investor network – initial investors who pump capital into start-ups, usually for a stake in the business – to complement government early-stage funding and more collaboration with the authorities would also fill some gaps, said Ganesh Mahendranathan, the Malaysia manager for Found8, a co-working space focused on innovation-centric companies. “There’s too much bureaucracy, a lot of people don’t know the ecosystem. Some of the key government agencies still have only acting CEOs. The new plan sounds promising, particularly the tax breaks – but make sure there are checks and balances.”
Currently, about 70 per cent of the VC market is made up of government or government-linked funds. Ideally, said Yeo, there would be at least 50 per cent private involvement and foreign VC firms which would bring with them “money and networks”.
Grab invests in start-ups in farming to shared kitchens to grow its super-app
“The government wants to see how we can attract more international VCs to be based here. A lot of our start-ups lack international exposure, they do not have the network to reach critical mass, so we want to bring this network to Malaysia – and leverage off it.”
However, according to industry insiders, international equity players such as Leonie Hill Capital or Vickers Venture Partners have remained largely inactive domestically after opening Malaysian offices in 2017 and 2018 respectively, with the latter receiving funding from a government-linked investment firm.
Regional VC firms which begin operations in Malaysia should do so “with strings attached”, said Victor Chua, founder of VC fund Vynn Capital. “I don’t think we need to focus 100 per cent on Malaysian VCs but we should encourage knowledge transfer. There has to be a developmental role so the local market grows.”
Industry players say Malaysia’s strength is its versatility: its start-ups are uniquely positioned to move to places such as Thailand and Indonesia, which have similar economic and infrastructural set-ups. “There are plenty of good companies in Malaysia, and the business can be replicated in other markets,” said Carsome’s Cheng. Indeed, Cheng said, success in Malaysia served as an effective gauge of the possibility of regional success.
“Thai and Indonesian start-ups tend not to go overseas – but if you can do well in Malaysia, chances are you will do well in these markets too and there is more chance of becoming a regional leader.” ■


Malaysia’s cunning plan for start-up dominance: if you can’t beat them, own them

Malaysia is looking to tap into the surging value of Southeast Asia’s internet economy. Illustration: Dennis Yip

PE Funding

Exhibitors and buyers attend the Global Source mobile electronics plus Start-up Launchpad Expo held at the AsiaWorld-Expo in Chek Lap Kok. 18APR19 SCMP / Felix Wong

Hamzah_VPP-231

Yeo Bee Yin, who leads the Energy, Green Technology, Science and Climate Change Ministry, Malaysia. 08AUG18 [21SEPTEMBER2018 FEATURES] CREDIT: Shamil Norshidi

A man passes a Grab sign at their office in Singapore September 23, 2016. REUTERS/Edgar Su GLOBAL BUSINESS WEEK AHEAD - SEARCH GLOBAL BUSINESS 5 JUNE FOR ALL IMAGES?

Eric Cheng_IMG_9788

Carsome, a fast-growing second-hand car trading platform in Southeast Asia, has chosen a Chinese startup as its role model. Photo / Handout

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The country has struggled to nurture home-grown tech success; now it hopes to steal a march on its rivals by becoming a venture capital financier instead
Officials hope that splashing the cash will eventually make Malaysia an attractive base, but in the meantime are aiming to pull the purse strings



Having struggled to nurture tech giants of its own, Malaysia is turning its attention to funding the region’s start-ups instead.


Malaysia’s cunning plan for start-up dominance: if you can’t beat them, own them

The country has struggled to nurture home-grown tech success; now it hopes to steal a march on its rivals by becoming a venture capital financier instead Officials hope that splashing the cash will eventually make Malaysia an attractive base, but in the meantime are aiming to pull the purse strings