The Securities Commission Malaysia (SC) has called upon venture capital (VC) management companies to apply for the RM1 billion ($253.9 million) fund committed by major institutional investors.
The committed amount will be invested in early to late stage private companies, with strong preference towards government-promoted sectors such as Information and Communications Technology (ICT) and biotechnology, an announcement from the SC said on Thursday.
The fund, that was announced as part of the Budget 2018 in October last year, would be allocated in selected sectors and coordinated by the country’s capital markets regulator Securities Commission.
In line with the announcement, the Venture Capital Fund Co-ordination Committee, comprising senior representatives from major institutional investors and chaired by the SC, has been established to co-ordinate the assessment and selection process of potential submissions by VC management companies.
“This latest initiative seeks to further enhance the VC ecosystem in Malaysia by addressing the funding gap for domestic startups, as well as accelerate growth and increase competitiveness of Malaysian SMEs. It also aims to attract greater participation from a more diverse range of players, facilitate knowledge transfer and strengthen industry expertise and skillsets,” the SC said.
To be eligible for consideration, applicants, both local and foreign, must be registered with the SC and demonstrate, among other criteria, experience and expertise in managing VC investments, it added informing that the submissions must be made to the SC by June 1.
Venture capital is seem as an attractive source of funding for small and medium enterprises (SMEs) and plays a crucial role in accelerating growth. The SC asserted that it will also help in transforming Malaysia towards a high-income economy driven by knowledge-intensive activities.
Over the years, the development of the VC industry in Malaysia has gained momentum as a result of close multi-stakeholder collaboration, including efforts through the Malaysian Venture Capital and Private Equity Development Council (MVCDC) chaired by the SC.