Malaysia-headquartered early-stage venture capital firm 1337 Ventures is teaming up with Canadian investment firm InnoStart Capital for its upcoming pre-accelerator programme Alpha Startups: Fintech Edition, that will kick off in July.
According to 1337 Ventures founding partner Bikesh Lakhmichand, the programme, which runs every quarter, will select three top startups to receive early-stage funding of RM50,000 ($12,560). InnoStart Capital will grant an additional RM75,000 ($18,839) to the top startup of the programme.
“This will be InnoStart Capital’s first engagement with Malaysian startups and we decided to go with the fintech team after working with local banks such as Hong Leong Bank, RHB and Maybank who will provide mentorship to the participating startups. We would like to see something different in terms of fintech, especially if it aims to solve the pain points of banking customers, besides digital wallets. The partnering banks will list down several problem statements for the participating startups to solve in order to address real business challenges that the financial services industry currently faces,” he told DEALSTREETASIA in an interaction recently.
On expansion plans for 1337 Ventures, Lakhmichand said, he was looking to expand the firm’s investment stage to cover early, seed as well as seed+ investments in a year’s time.
“Maybe in more than two years’ time, we will look to dabble into the series A level, when most of our portfolio gets to that level as it makes sense for us to raise funds and stay in that space. For now, we are good at pre-seed and seed stage funding.
“The early-stage investment scene is still not saturated yet. In Malaysia, RM20,000 ($5,023) to RM50,000 ($12,560) is good enough to kickstart something already. About 60-70 per cent of the startups we invest in will go on to raise their subsequent funding round,” he elaborated.
Commenting on the VC investment landscape in Malaysia, Lakhmichand said corporates in the private sector are getting increasingly active to work and/or invest in startups, thanks to the Malaysian tax incentive for startup investments.
“The corporates are also realising that their customers or clients are demanding new things, and the quickest way is to work with a startup and leverage on their innovative skills to come up with a solution or a new product for the corporates.
“More corporates are coming into the startup investment space because they don’t have the human capital and innovative solutions, so you see acquisitions happen quite frequently in this early-stage investment space, although smaller, you get quite a good return. Hence, we’re still here,” he said.
1337 Ventures had previously exited live music booking startup Gigfairy to Tune Studios and BAC Ventures in 2016, a startup that had gone from inception to acquisition in 12 months. The startup was one of the participants of Alpha Startups.