Malaysia: ECF players, Quest Ventures now co-investors with Cradle Fund

Cradle Fund CEO Nazrin Hassan and chief investment officer Juliana Jan (centre two) with the new co-investment partners.

By Liz Lee

June 24, 2016

Malaysian tech startup influencer Cradle Fund has roped in six other investors into its equity co-investment programme, revealing that five of the present six licensed equity crowdfunding (ECF) operators in Malaysia are on board.

The sixth investor is Singapore and Beijing-based venture capital firm, Quest Ventures.

The ECF partners involved are Crowdo, Crowdplus.asia, PitchIn, FundedByMe and Ata Plus.

Quest Ventures will be committing MYR1 million, to which Cradle will match one-to-one with another MYR1 million.

For the ECF partners, there are not set commitments as yet, as each will pool together from their own pool of angel investors and sophisticated investors for co-investment deals with Cradle. However, Cradle is prepared to inject up to MYR500,000.

The deals under the partnerships will follow Cradle’s mandate – to invest in tech startups.
Cradle’s investment and relationship management vice president, Juliana Jan said the amount was not disclosed for the ECF partners as each would be contributing different amounts depending on how much the angel investors on their platform pledge.
The ECF players, however, stated that they each will be looking for two to a maximum of 20 deals over the next 12 months.
“It varies among them, but Crowdo and Crowdplus are targeting one or two deals a month, if that would make it about 20 in that period,” she said.
“We are open to other types of partners, this isn’t specific to VCs only. If you look at our list of partners, we have institutional investors like Captii Ventures, which is the investment unit of Captii Limited. ECF is another domain for raising capital, and this is another way for Cradle to also support angel investments,” she told DEALSTREETASIA, noting that Cradle’s partnership could encourage angel investors to work with ECF platforms.
Group chief executive officer Nazrin Hassan commented that having ECF operators in the pool of co-investment partners is a move to diversify the circle of them.

“We wish to have a diversity of institutional investors in our co-investment circle and to include not only venture capitalists and institutional investors, but also bring in ECF platforms whose investors consist of sophisticated angels who are no strangers to funding early stage businesses,” he said.

He noted that working with the ECF operators may give Cradle the upper hand in sourcing for disparate types of high potential deals in the market that venture capital investors may give a pass on.

Ample funds raised

With this announcement, Cradle now has a total of 25 equity co-investment partners. The co-investment programme began towards the end of 2014, and new groups of co-investment partners were announced every few months.

Prior to this, a total of MYR159.2 million had been raised from the previous five cycles of partnerships. The MYR2 million from Quest Ventures and Cradle will make the new total committed capital MYR161.2 million ($40.68 million).

Of that, only MYR4.025 million has been invested into three companies – Bemalas, MauKerja and SyncMedia so far.

In April, Cradle had sounded a target to raise its co-investment war chest to MYR200 million ($50.92 million) this year, with 10 more co-investment partners to come on board.

Also read: Cradle Fund aims to hit $51m for co-investment fund, 9 deals in making

Cradle Fund doubles co-investment value with 5 new partners, raises $16m

Jan commented that many of Cradle’s co-investment partners have taken a step back in investing during the first six months of this year, against the backdrop of slower macroeconomics.

“Some are still very actively looking at companies, pushing deals through us to see but some are waiting (for the market),” she said, the hesitation was due to sentiment even as valuations have become more attractive.

Jan added that Cradle is hoping to close another four deals within this year.

An agency under the Ministry of Finance, Cradle’s co-investment programme is part of its efforts to reduce government-linked agencies’ dependence on government funding and to encourage more private investments into funding local technology startups.

Cradle is working on restructuring its funding allocation to 70 per cent co-investing activities, and 30 per cent direct grant by 2017.

Also read:

Cradle Fund, KK Fund co-invest $500k in Malaysia based Bemalas

Cradle Fund, OSKVI invest a combined $550k in Sync Media and MauKerja.my

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.
APPLY NOW

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.
APPLY NOW