ADIF, that aims to fund local digital firms, is a partnership between Malaysian telecom firm Axiata Group and government owned venture capital vehicle Malaysia Venture Capital Management Bhd (Mavcap). It has a target fund size of $23.14 million (MYR 100 million).
The investment from JCorp adds to about $11.5 million (MYR50 million) and $4.6 million (MYR20 million) committed by Axiata and Mavcap , respectively, for the fund that is on road. The remaining is to be raised from other principal investors to achieve the target fund size, ADIF said in a statement on Wednesday.
Government-linked JCorp is a typical investment holding firm with varied interests in palm oil, healthcare, property development, food and beverage, and oil and gas, among others. Some of its portfolio companies include Kulim, KPJ Healthcare, KFC chain operator QSR Brands and Maju. As a state-owned vehicle, it is also likely to have a mandated role in Malaysian government’s digital innovation agenda.
Founded in 2014, ADIF aims to aid digital startups that are already revenue-generating operations requiring further support to grow in terms of funding, know-how and market access. Additionally, through Axiata’s extensive market reach across Asia, ADIF provides the digital entrepreneurs with access to regional customers and partnership opportunities.
The fund has over MYR30 million committed till now in 13 investee companies in various sectors including travel, business services, food and beverage, education, telematics, logistics and consumer lifestyle. At the end of 2016, ADIF’s portfolio companies had grown to generate almost MYR60 million in revenue and support 918 direct jobs, ADIF claimed.
“In line with our purpose of ‘Advancing Asia’, we started this fund as part of our corporate responsibility. By 2020, Axiata hopes to nurture and fund a substantial number of Bumiputera and Malaysian digital services businesses with an end-goal of building four to five regional champions,” Axita Group CEO Tan Sri Jamaludin Ibrahim said.
Axiata has also replicated the fund model in Cambodia through its operating company, Smart Axiata.
ADIF is managed by Intres Capital Partners, a subsidiary of MAVCAP and a partnership between MAVCAP, Questmark Capital Management and Teak Capital Sdn Bhd.