IN YET another sign that the Malaysian startup ecosystem is growing up, Cradle Investment Fund Sdn Bhd has introduced a new grant product, its Cradle Investment Programme 300 (CIP300), that it’s CEO, Nazrin Hassan, described as a product designed to wean the ecosystem off grants.
“With the funding market maturing, it is time to mature our entrepreneurs as well and one way is to lessen their dependency on grants, especially where there are other alternative funding options such a crowd funding platforms and angels.”
The weaning off has already started with Nazrin only mentioning “grants” once during his remarks in announcing the CIP300. Cradle’s subsequent press release makes almost no mention of the word, instead choosing to describe it as a funding programme and “structured investment product”.
The focus of CIP300 is to assist early stage entrepreneurs to both develop and commercialise innovative products with 60% of the funding specified for commercialisation activities, 40% for product development and other areas including salaries.
The introduction of CIP300 comes on the heels of a December 2016 announcement to revamp their long standing conditional grant products, CIP Catalyst, a pre-seed funding for product development of up to RM150,000 and CIP500, a seed type funding for commercialisation purposes of up to RM500,000.
This strategic re-routing as Nazrin describes it, is part of Cradle itself evolving to remain relevant to the market and entrepreneurs by positioning itself in the part where it is really needed. And despite the growing angel scene, thanks to the efforts of MBAN, the Malaysian Business Angels Network, a yawning gap still exists for early stage businesses at the ideation and prototyping stages as well as early commercialisation stage.
And with its decades long experience of building the early stage ecosystem, Cradle also sees a clear need for it to not only give funding to entrepreneurs but to also tie that money down with a strong coaching component, leading Nazrin to point out, “You are getting less money but you are receiving more.”
This “more” isn’t just from the coaching, which will be delivered by Proficeo Sdn Bhd, the company behind Cradle’s formidable Coach & Grow Programme. It also comes from Cradle’s network.
“We pretty much know everyone from the early stage space and can match you with investors, corporate players, other agencies as well,” he says.
CIP300 will also deliver match making with Cradle’s partners, internal training programmes around innovation and commercialisation, participation in business and networking events and even media and public relations, which startups struggle at.
“Our entire capabilities as a value-add player will be brought to bare on our new arrangement,” says Nazrin, keen to emphasise this aspect of CIP300.
An exciting new aspect of Cradle’s value-add are the Memorandas of Understanding (MoU) which Cradle and MBAN sealed with K-One Technology Bhd (KiasuLab) and Sunway University Sdn Bhd (Sunway Innovation Lab or iLabs).
Cradle hails these collaborations as a milestone in Cradle’s continuous efforts over the years to draw in private sector participation into the startup ecosystem and expects both K-One and Sunway University to play a key role in the provision of value-added support to CIP300 recipients, specifically around investment and other mutually beneficial opportunities.
Dr V Sivapalan, MBAN president even hailed the MOUs as a big step forward in taking the Malaysian ecosystem “to a new level”. “In the past, our angel scene has been slow to develop but that has changed now with MBAN having 175 registered high net worth investors, and counting. Our monthly pitch sessions now sees between 70 to 100 angels in attendance, to listen to the curated pitches of between 6 to 7 startups,” he shares.
But corporate involvement has not caught on the way Cradle and MBAN would like which is why they see the involvement of K-One and Sunway University as a potential catalyst to spark this leg of the ecosystem.
“It is still the missing link and it’s a critical one for the ecosystem to develop further,” says Sivapalan, listing market access, customers, domain expertise and the tech that corporate players bring to the table.
Indeed, corporate players bring these and much more to the table as witnessed where K-One’s CEO, Martin Lim Soon Seng, shared that the design and development company has around 30 engineers at its Klang Valley design centre with relevant hardware that helps them converts ideas to products for their customers. With its co-working space, Kiasu Labs established adjoining to its design centre, “we want to work with hardware startups to share our expertise, experience and equipment with them.”
On the other hand, Sunway University’s iLabs, being part of the multi-billion ringgit Sunway Group conglomerate, brings a lot more to the table. “We actually see a lot of ‘me too’ innovations in the startup space and that’s why we want to work with them to solve real problems, starting with the Sunway Group itself,” says Matt van Leeuwen, iLabs director.
“We welcome startups to come and solve some of the challenges the Sunway Group faces. We will be an excellent testbed for them to validate their services and products with the startups enjoying the brand value of working with Sunway Group and which can also lead to contracts for them.”
Surely music to the ears of hungry startups, especially those with innovative solutions. And much more valuable to them than just any funding, hence Nazrin emphasizing that startups will be receiving more with CIP300.
Source: Digital News Asia Media Release