From Deal Street Asia
By Liz Lee April 28, 2015
Mercatus Ventures MD Raiyo Nariman, KK Fund Koichi Saito, Cradle CEO Nazrin Hassan, Start Up Nation founder Anne Cheng, Kathrein Ventures co-founder and CEO Charles Kathrein and Captii Ventures group GM and ED Ng Sai Kit at the ceremony marking the co-investment partnership.
Early stage ecosystem influencer Cradle Fund Sdn Bhd has doubled its co-investment value with another batch of partners. The total value raised now stands at MYR56.7 million ($15.97 million).
The five new partners are Captii Ventures Pte Ltd, Kathrein Ventures Pte Ltd, KK Fund, Start Up Nation Sdn Bhd and Mercatus Ventures Sdn Bhd.
Collectively, they bring in MYR14.35 million, which the Cradle Fund will match in value.
The equity co-investment deals will be structured on a one-to-one basis with Cradle Fund’s ceiling marked at MYR500,000 in each deal. That maximum for Cradle Fund means that each co investment deal will be a maximum of MYR1 million.
The partners, however, may independently choose to invest more in a startup should they be interested to, outside of the co-investment deal.
Cradle CEO Nazrin Hassan said the objective of the co-investment partnership program was not limited to attracting private funds to participate in early stage funding for technology startups, but also to diversify its value-add base and attract foreign funds, hence creating more visibility for the Malaysian startup ecosystem.
“Eventually, over the medium to long-term, you will reach a point when private funding will be leading the venture capital ecosystem in the country, with only a minimal contribution by the government and public funding,” he said in his speech, noting that such a mature funding ecosystem would likely take a decade to achieve.
With the five new partners on board, Cradle Fund now has 10 co investment partners to date.
The previous batch of equity co-investment partners were Fatfish Ventures Sdn Bhd, OSK Ventures International Bhd, CoEnt Venture Partners Pte Ltd and Crystal Horse Investments Pte Ltd. In this batch, the co-investment fund size came up to MYR11.5 million.
In June last year, the influencer also signed a grant co-investment deal with Singapore-based Golden Gates Ventures (GGV). Under the same structure, Cradle Fund was to match GGV’s investment of up to MYR500,000.
By the end of this year, the group aims to forge co-investment partnerships with 21 local and foreign investors. As for companies it is looking to invest under this co-investment program, he said there are two deals in the final stages of being closed.
From the broader perspective, Cradle Fund Investment and Relationship management vice president Juliana Jan said there are around 20 companies being evaluated at the moment and the intention was to seal 7 deals by the end of this year.
It is actively looking through 170 deals in total.
Government-supported Cradle Fund, which earlier provided grants solely to the startups, has begun gradually reducing grant-giving by adopting the co-investment structure. Cradle Fund’s target is to hit a fund allocation ratio of 70 per cent co-investments and 30 per cent direct grants by 2017.
In its 10-year track record, Cradle Fund has funded almost 700 Malaysian technology start-ups through its CIP Catalyst product development grant and its CIP500 product commercialisation grant.