With nearly two decades of entrepreneurial experience under her belt, Nuraizah Shamsul Baharin knows a thing or two about the challenges of building a business. With her fintech startup MADCash, she is seeking to alleviate the same challenges for other female entrepreneurs, especially those who are underbanked or have a bad credit history, by providing zero-interest loans.
In an interview for DealStreetAsia’s upcoming report on female founders in Southeast Asia, the former engineer says her focus now is on scaling up the venture, which currently works with about 1,000 women. To do that, she bolstered her team by roping in the startup’s former lawyer, Musyrifah Malek, as a co-founder to run its operations last year. MADCash has also secured pre-Series A funding from Artem Ventures, MSW Ventures and ScaleUp Founders Fund.
While Shamsul Baharin says she found a mentor in one of her investors, she concedes that venture capital (VC) firms tend to evaluate male and female founders differently.
“VCs tend to view female founders based on their age and family status. If a woman is younger and has kids, having a male co-founder would increase the chances of getting funding. If a woman is more mature, VCs would want to see co-founders and keyman insurance in place,” she said.
“I have been told many times that VCs will not invest in single-founder startups, yet we see that they do with male founders.”
The full interview is below:
What inspired your journey into entrepreneurship?
I am an engineer by background and worked in multi-national corporations as a product and R&D engineer. I was good enough at it to have received an internal patent and tech awards from those companies. However, I have always wanted to run a business; my dream is to have a bookstore café’.
My six engineer friends and I had made a pledge that we will have our own business by the age 30. Only three of us did it; I built mine at the age of 32. It was a software company, not a bookstore, because, logically, a software business does not require a lot of capital. But who knows? One day I might still have my bookstore.
To what extent has your experience as a female professional influenced the way your company is run?
My experience as an engineer has allowed me to do both the business and the technical side, I am more inclined to use logic and numbers as the decision factor in any crisis. In the early years, I was accused of being like a “man” because my team expected me to be more nurturing and found my tendency to behave logically as cold.
After many years in business, I am now comfortable in my own skin and use both assets – logic and kindness – to build a company that I am proud to have with people who share the same vision and beliefs.
Can you share your insights on the fundraising process you went through?
I wasn’t looking for venture capital (VC) specifically. I was focused on the funders so that I could run the entrepreneurship development program and have funds to give as zero-interest loans [to female entrepreneurs].
I joined accelerators to learn how to better grow my business and it was ScaleUp Malaysia’s programme that offered us pre-seed funding. At that time, I realized that I was not getting any younger, and it was a now-or-never situation to really take the leap to grow MADCash. We received a pre-seed funding of 250k ringgit in September 2022, and a year later, we raised another 5 million ringgit from three investors. We are fortunate to have investors who believe in the impact that we are building.
Did you meet female investors during your fundraising efforts, and if so, did it impact your discussions?
Yes, I met Renuka Sena from ScaleUp Malaysia, who also became my mentor in 2022. She was the first person to believe that MADCash could be bigger than what it was then. It is only in 2024 that I have met more female investors, and it has been a great experience. They are both supportive as well as generous in giving their thoughts and ideas on how we can grow MADCash to be investor-ready.
In your opinion, what are the benefits of having a co-founder?
It helps assure the VCs that I have a team behind me. As is often with startups, the founder does everything initially.
My co-founder, Musyrifah Malek, started out as our lawyer. We have known each other for 10 years, and I found out that she was interested in the vision that I have for MADCash. She complements what I lack and together we make a great team. We have also separated our roles so that I can focus on what I do best, which is strategy and business development, and she handles the company’s operations.
With the funding received, we are also able to build a strong management team which includes our latest hire, a chief financial officer.
What have been the most challenging aspects of your role as an entrepreneur?
Running a business that is self-sustaining, I started MADCash by building a business model that would allow us to cover the operational expenses.
As we grow the team, we are working on how we can scale up. If we work with 1,000 [female SMEs] now, what would it take to impact 1 million lives? We are also looking at new revenue streams to bring back the balance, investing in technology as well as streamlining our processes.
Do you believe female founders face additional hurdles in raising capital during the current funding climate?
Definitely, VCs tend to view female founders based on their age and family status. If a woman is younger and has kids, having a male co-founder would increase the chances of getting funding. If a woman is more mature, VCs would want to see co-founders and keyman insurance in place.
I have been told many times that VCs will not invest in single-founder startups, yet we see that they do with male founders.
Why do you think there’s a scarcity of women-led startups, and are there any unique factors in Southeast Asia contributing to this trend?
Women entrepreneurs are mostly in traditional businesses like F&B, health and beauty, fashion and education, and they are not seen as startups. The upcoming ones are focused on social enterprises. Usually, a startup requires a tech solution which
they have yet to figure out or do not see the need to have one.
Another reason could be that most young women who are married will focus on their family as they raise their children. This is the sacrifice that many women make to take a step back for the sake of the family. Those who are married with children often have their partners in their business too.
What advice would you offer to aspiring female entrepreneurs?
It is important to have the skills to build a business, which can be learnt, and to find co-founders who will complement each other so that you have the business and technical sides covered. Don’t do it alone; find a mentor who will pull you up.
