KUALA LUMPUR: Malaysia Venture Capital Management Bhd (Mavcap), the country’s largest venture capital (VC) company, is upbeat about bringing new investments and will continue to invest locally and worldwide despite market uncertainties.
Mavcap chief executive officer (CEO) Jamaludin Bujang said since its inception in 2001, the company has invested more than RM1 billion in more than 160 companies in Malaysia and Asia.
“As a venture capitalist, Mavcap is focused on investing in businesses that can generate a significant value in a defined period of time.
“We want to provide a solid platform for our investees to take their business to the next level,” he said in an interview with Business Times recently.
He said the investments were made either directly in the companies or via its partner programmes.
Previously, a majority of Mavcap’s investments were in start-ups.
“But today, we are investing a lot more in steadier companies. It’s not because we became stricter in the way we invest, but we became more experienced. We learnt what works and what doesn’t.”
Jamaludin, 51, who joined Mavcap in 2011, said the company has also become more proactive when it comes to investments, adding that Mavcap also facilitates professional development programmes.
“When we see companies with strong potential, we will make the first move by approaching them.
“In order to increase private sector participation in fundraising and reduce reliance on government funds, we have also identified potential partners whom we could work with and we are geared up to make this a success,” he added.
Mavcap has evolved over the last 15 years to become one of the most important domestic players in the country’s VC industry.
Mavcap’s focus is to support Malaysian-based information, communications and technology companies as well as the VC industry.
The government-owned company is also committed to technology sectors and will continue to invest in a mix of local and overseas businesses to bring together a successful blend of technologies and entrepreneurial skills.
The agency is also focused on corporate governance and provides the expertise needed for investees to flourish.
Jamaludin said the company has raised more than RM650 million in recent years, contributed about RM60 million to the government’s revenue and generated more than 1,000 jobs.
He said in Malaysia, there are 15 firms under Mavcap’s portfolio listed on Bursa Malaysia, including Censof Holdings Bhd, Aemulus Holdings Bhd, Kelington Group Bhd and Fibon Bhd.
Jamaludin said companies under its portfolio have collectively made about RM1.5 billion in revenue and RM250 million in profit.
He said the company plans to set up three more funds worth US$250 million (RM1 billion), through collaboration with major corporations locally or abroad, to invest in technology companies.
“We are working on it. If everything goes according to plan, we aim to launch the funds sometime next year.”
To date, Mavcap has created 17 funds and trained more than 50 local VC fund managers.
Current funds include ECM Straits Fund I, Gobi Fund III, 500 Durians LP, 500 Startups Fund III, Axiata Digital Innovation Fund and SuperSeed Fund.
Mavcap is confident of bringing regional investments into Malaysia and discussions have started with a few companies outside the country.
“We look forward to identifying, investing and growing promising local and regional technology companies, and helping them become regional and world champions.
“We believe this goal can be achieved with our combined strengths in networking, experience and determination to turn Malaysia into a regional hub for technology development and entrepreneurship,” he added.
In March, Mavcap and Shanghai-headquartered VC firm Gobi Partners Inc launched a RM60 million venture fund to finance seed-stage companies across Southeast Asia.
The fund, known as Gobi Mavcap Asean SuperSeed Fund (SuperSeed Fund), has an average deal size of RM2 million and is expected to invest in 25 to 35 start-ups over the next three years.
The SuperSeed Fund will focus on Asean-based companies in various prime sectors, such as financial technology, e-commerce, advertising, cloud computing, content and digital media, Muslim innovation and online tourism.
The geographical focus of the fund will be on start-ups in Indonesia, Malaysia and Singapore markets.
To date, the fund has approved investments in five companies in Malaysia, Indonesia and Vietnam, namely Enlinea Sdn Bhd, Off Peak Hub Sdn Bhd, Recomn Technologies Pte Ltd, Triip Pte Ltd and YToday Sdn Bhd.
VC is increasingly recognised as an important component of a number of entrepreneurial ecosystems around the world.
Among the Southeast Asian countries, Malaysia came in second with US$248 million in VC investments over the last five months, after Singapore.
Jamaludin said with a number of local and international firms, a large part of VC’s role is to fuel innovation and mass adoption.
This fuel comes in the form of capital, structure, access and expertise. Each of these factors plays a critically important role in aiding start-ups and entrepreneurs.
Regulated by the Securities Commission (SC), Malaysia has more than 200 VC and private equity firms.
Last year, the total committed funds in the Malaysian VC and private equity industry stood at RM7.15 billion, representing an increase of 15.18 per cent year-on-year, championed mostly by public funds.
According to SC in its 2015 Annual Report, public funds remain the largest source of capital for the industry, with sovereign wealth funds and government investment companies making up 49.76 per cent, and government agencies contributing 37.98 per cent.
Private sector contributions to the industry were led by corporate investors (6.43 per cent), followed by foreign investors (1.97 per cent) and asset managers (1.45 per cent).
Mavcap was among the top three registered corporations by amount of investor commitments.