The Malaysian government-linked early-stage investment fund, Cradle Fund Sdn Bhd, has attracted an additional RM41 million ($9.9 million) seed funding or commercialisation funding from external investors – both local and foreign – from 2008 to 2016 for its CIP Catalyst programme. CIP Catalyst was launched in 2008 with up to RM150,000 ($36,372) financing to fund innovative ideas and prototype development. Between 2008 and 2016, 375 ideas were approved where 168 were commercialised, with 42 ideas successfully obtaining further funding. Total approved funding was RM54.5 million ($13.22 million). In the unveiling of its impact study done in collaboration with HELP University, Cradle Fund acting CEO Razif Aziz said the firm’s flagship product – Cradle Investment Programme (CIP) has had a significant impact on the Malaysian economy over the years. “The CIP demonstrates that the right funding at the right time, combined with the extensive ecosystem development and support for which Cradle is known for, can bring far greater outcomes than that of ordinary public spending,” he told a media briefing on September 3. The agency had also attracted RM1.3 billion ($320 million) in private fund and foreign funds into Malaysia, besides creating over 80,000 new full-time jobs. The study added that the firm’s contribution to the nation’s GDP is expected to reach RM30.8 billion ($7.53 billion) by 2030. According to the survey results, which was done with a sample size of 112 companies from the CIP500 programme, more than 50 per cent of the funded businesses were profitable three years after. About 24 per cent of startups were at the risk of becoming irrelevant while 22 per cent were scaling their businesses but were yet to earn profits. More than 75 per cent of the companies can be considered as on track to becoming successful small and medium enterprises (SMEs) despite many of them not demonstrating the characteristic growth patterns of startups. CIP500 was launched in 2009 with financing up to RM500,000 ($121,242) for 212 projects approved up to December 2016 and total approved funding was RM104 million ($25.22 million). To this, Razif noted that importance of diversifying Cradle’s funding portfolio by working with other government agencies could address the gap within non-digital startups of various industries. Currently, a majority of Cradle’s investment portfolio comprises of digital startups. “We’ve built an ecosystem in the past 15 years to try to fill gaps, extend our reach and portfolio and we will continue to do that. But it is also important that the private sector participate because the government’s role is to be a catalyst and attract private funding so the corporates will need to take over when we move past the early stage,” said Razif. Cradle had told DEALSTREETASIA that it will look to focus more on direct equity investments and to reduce its grants in order to increase the agency’s participation in early-stage deals. Incorporated under the Ministry of Finance in 2003, Cradle is an early-stage startup influencer, and has funded over 800 Malaysian startups since. It now offers both funding and investment assistance through CIP500 and Direct Equity 800 (DEQ800) where the latter offers up to RM800,000 ($195,528) financing to Malaysian startups. It also launched a VC arm, Cradle Seed Ventures (CSV) in 2015 with a RM40 million ($9.7 million) debut fund. This portal had first reported that CSV is about to launch its second fund CSV II at about $20 million. The firm currently has nine companies under its portfolio with three of them came from Cradle’s CIP500 programme. Headed by CEO Dzuleira Abu Bakar, CSV typically makes Series A or investments between RM1 million ($240,000) and RM3 million ($730,000).
Read more at: https://www.dealstreetasia.com/stories/malaysias-cradle-fund-attracts-10m-seed-funding-for-cip-catalyst-programme-106027/