Axiata, Mavcap to set up RM100m venture capital fund

RUPA DAMODARAN





KUALA LUMPUR: Axiata Group Bhd and Malaysia Venture Capital Management Bhd (Mavcap) will jointly set up a RM100 million venture capital fund to grow the number of innovators in the country.

The Axiata Digital Innovation Fund (ADIF), which is poised to be Malaysia’s largest digital corporate venture capital fund, will be launched by next month.

Axiata will commit RM50 million to the fund while Mavcap will contribute RM20 million for the first phase, with the remaining to be raised from other principal investors.

Axiata, one of the largest Asian telecommunications companies, is targeting to build five to 10 regional champions, taking advantage of its 13 million customers in Malaysia and over 250 million across Asia.

Axiata group president and group chief executive officer Datuk Seri Jamaludin Ibrahim said 70 per cent of the fund would be extended to Bumiputera companies, with the remaining to the rest of Malaysians.

“Axiata has been growing significantly over the last few years and now feels a responsibility to spur other Malaysian companies, especially Bumiputeras, to become successful too…. in line with our ‘Advancing Asia’ via connectivity, technology and talent.”

The signing ceremony was witnessed by Prime Minister Datuk Seri Najib Razak and Communications and Multimedia Minister Datuk Seri Ahmad Shabery Cheek.

It meets the government’s plans to build up the capabilities of Bumiputera technology companies in the digital services space with innovative products and market fit.

Among the criteria used to access the fund is that it has to be revenue generating, but requires support to grow in terms of funding, know-how and market access.

On the other principal investors, he said several have been identified for the second phase of the fund.

Mavcap chief executive officer Jamaludin Bujang described the collaboration between a government-backed venture capital firm and a corporate investor as unique.

“We hope that with this initiative, more Malaysian corporations will realise the value in actively investing and participating in venture capital funds. This is more crucial for Malaysian multinationals to remain competitive in the face of fiercer competition from their foreign-owned counterparts as the economy becomes more liberalised in the future.”

Mavcap and partners Teak Capital and Questmark Capital are the managers of the new fund.

To be eligible, companies must have a scaleable product and economical business plan to enjoy funding a maximum of RM10 million.

Between 10 and 15 Series A level companies stand to benefit from the fund, Jamaludin added.