KWAP to invest RM500mil into newly launched Dana Perintis Fund

KUALA LUMPUR: Kumpulan Wang Persaraan (Diperbadankan) (KWAP) will invest up to RM500 million over the next 18 to 24 months into the newly launched fund called Dana Perintis, which is aimed at injecting vitality into Malaysia’s venture and startup ecosystem.

Its chief investment officer, Hazman Hilmi Sallahuddin, said Dana Perintis encompassed two strategic pillars of investments into selected Malaysia-focused venture capital (VC) funds and direct investments into early-stage companies.

“With an allocation of RM250 million for each pillar, KWAP’s initiative aims to accelerate growth within the Malaysian entrepreneurial landscape in line with KWAP’s sustainability commitment as a signatory of the UN Principles for Responsible Investment (PRI),” he said in his speech at the launch of the fund here, today.

Hazman said that Dana Perintis is an initiative that also serves as a testament to KWAP’s commitment to enhancing the growth of Malaysia’s startup industry.

“With Dana Perintis, we are not just investing financial capital, but also putting in our expertise, resources, and commitment to seeing these Malaysian startups succeed on a global stage, especially with the ones we are directly involved in,” he said.

Meanwhile, Economic Minister Rafizi Ramli said the launch of the Dana Perintis fund by KWAP fits neatly into the national agenda of reinvigorating the startup ecosystem.

“The significant allocation of RM500 million is an important recognition that good ideas need to be backed, and more good ideas need a chance to be developed. By putting a significant sum into early-stage (startups) and incubators, we also come to accept the reality that the future is Asean, and Malaysia is the best testbed for the largest economic blocs in Asia.

“The Dana Perintis will draw international investors and VCs to set up offices in Kuala Lumpur and explore the region, bringing experienced founders and funders network that would create a chain reaction of innovative ventures,” he said.

As one of Malaysia’s prominent investors, Hazman said KWAP seeks to play a pivotal role in steering the nation toward a flourishing early-stage ecosystem, and by strategically investing and addressing critical gaps, KWAP aims to propel the growth trajectory of the startup landscape, reaping attractive risk-adjusted returns for its stakeholders.

“A substantial portion of up to RM250 million will be directed towards investing in VC funds with exposure focusing on Malaysia. This approach aligns with KWAP’s endeavour to support the development of a self-sustaining venture ecosystem.

“These VC funds serve as dynamic catalysts, nurturing innovative startups by providing essential capital and guidance. KWAP’s strategic investments will span the spectrum of the startup journey ranging from accelerators to growth managers-contributing to the maturation of the overall Malaysian venture space,” he said.

In parallel to the fund investments, Hazman said another RM250 million will be committed towards direct investments into promising early-stage companies, echoing KWAP’s intention to nurture startups through growth and expansion stages.

“We are dedicated to empowering startups and small and medium enterprises (SMEs), supporting employment, and nurturing innovation. In realising these visions, KWAP has already identified several potential startups to invest in, which currently employ more than 1,000 Malaysians from different backgrounds,” he added.

Meanwhile, Rafizi said the government would announce a development blueprint for VC and startups in the first quarter of next year to ascend Malaysia to the 20 cities globally that offer the best ecosystem to incubate startup businesses, up from the current 42nd place.

The minister said the government intends to achieve its goal by forming a marketplace that is conducive for startups to be incubated through measures like attracting more foreign VCs to invest in the country, streamlining efforts to cut red tape that deters the establishment of new businesses, and organising tech conferences by early next year to encourage engagement within the startup community.

“The idea is to place Kuala Lumpur in the top 20 of global startup ecosystems in the world. We are putting everything in place. It’s going to be in the first quarter of 2024. We will launch our sectoral blueprint for the startup ecosystem, which will be called KL20,” he said. – BK