The Malaysian government has engaged consulting firm McKinsey & Company to look into ways to build Malaysia into the technology startup hub of Southeast Asia, and lure US and Australian investors.
The Financial Review reported that McKinsey is in the process of speaking with international venture capital firms including, the investment firms from the US and has invited companies from Australia to discuss potential funding and entrepreneur partnership programs.
Secretary general of Malaysia’s Treasury, Ministry of Finance, Dr Mohd Irwan Serigar Abdullah said the consulting firm will deliver a report to the Treasury secretary in August, which will be used to inform the Malaysian government on the best approach to support and grow technology entrepreneurship in the country.
He said partnerships are an important part of the strategy to propel Malaysia’s tech startup hub plans. “VCs are contacting me and we are looking at ways to partner … when you partner you can learn fast,” he said.
The Malaysian Global Innovation and Creative Centre (MaGIC), which was funded with $50 million from the Malaysian government and of which, Dr Irwan is the chairman, will be the central point to link new and existing government funds and incentive programs together.
Within the next three-years Dr Irwan said he wanted Cyberjaya, a satellite city located about 20 kilometres from downtown Kuala Lumpur, to be hub of South-East Asia’s technology startup activity. He added that he intends to create a hub that is better than Silicon Valley.
“For Malaysia to earn its name as Southeast Asia’s version of Silicon Valley, it will have to leapfrog other countries with already more advanced entrepreneurship programs and funding arrangements, including the likes of Singapore and South Korea,” the report said.
The Malaysian government also hopes to lure Australian investors away from more mature startup markets and towards Southeast Asia’s ecosystem, which is feeding a technology-hungry 630-million population.
The Singapore government’s generous co-funding grant and equity arrangements for early stage startups have been able to attract global investment firms including the likes of SoftBank and US VC firm, Sequoia Capital, to the region.
MaGIC CEO Cheryl Yeoh said Malaysia has the promise of becoming a successful startup hub.”Singapore is known to be the start-up hub right now [in the region] because the government has made it easy for VCs to set up there … Malaysia has all the ingredients, we just need to pull it all together,” Yeoh said.
Yeoh was recruited by Dr Irwan to head MaGIC after spending 12 years in the United States, where she eventually sold a technology start-up to Walmart Ventures, the digital arm of US retail giant, Walmart.
She noted that many of the largest technology IPOs and exits to come out of the region are started by Malaysian founders and Malaysian-based operations.
JobStreet.com was recently bought out by Australia’s SEEK, Japanese telco SoftBank backed GrabTaxi and ASX-listed iSelect backed iMoney – all were among the biggest start-up exits in the region and originated from Malaysia.
“The market is available already, you don’t have to depend on the US or Chinese market, we have the population here. The problem isn’t the market, the problem is you need the globally-competitive technology and you need the programs,” Dr Irwan said.