Malaysia Venture Capital Management Bhd (Mavcap) has signed memoranda of understanding (MoU) with two international venture capital (VC) firms to set up investment funds of up to US$450mil (RM2bil).

In a statement, the government-owned venture capital firm said its collaboration with China-based Gobi Partners would see the establishment of the Asean growth fund, targeting up to US$200mil, while its tie-up with Silicon Valley-based Elixir Capital would involve the setting up and operation of the global Islamic economy fund, targeting up to US$250mil.

According to Mavcap, the Asean growth fund would focus on later stage financing for innovation and technology-related growth stage companies in Malaysia and the South-East Asian region.

The global Islamic economy fund, on the other hand, would focus on nurturing and supporting the Islamic innovative funding ecosystem. This would be done in partnership with Affinis Labs from the United States.

“We believe these two new funds will enable us to leverage on untapped opportunities to accelerate the development of the VC industry, both in Asean and in Islamic markets,” Mavcap chief executive officer Jamaludin Bujang said.

“This will also create greater prospects for promising Malaysian start-ups, as funds such as these will help foster innovation and ultimately contribute towards cultivating a vibrant and dynamic VC ecosystem in Malaysia, and further elevate Malaysia’s position in the regional funding ecosystem,” he added.

Mavcap had previously collaborated with Gobi Partners and Elixir Capital on other VC funds.

They included the Gobi Mavcap III fund, which focused on early stage IT and digital media companies in Malaysia, South-East Asia and China; the RM60mil Gobi Mavcap Asean SuperSeed fund, centred on Asean-based Internet and mobile technology start-ups; and the US$50mil ECM Straits fund, which targeted technology companies in the United States and the region.

To date, the Gobi Mavcap III fund had invested in a total of 13 companies, while the SuperSeed fund had invested in 10 companies and ECM Straits fund in 12 companies, including Fashion Valet and The Lorry.

In the group’s latest collaboration with Mavcap, Gobi Partners managing partner Thomas Tsao said the group impressed by the quality of South-East Asian entrepreneurs.

“We are excited to partner with Mavcap once again on the Asean growth fund, as it is now a very exciting time to be doing business in the region... we believe that the current challenges faced by Asean will not be solved by Silicon Valley start-ups, rather, they will be solved by home-grown entrepreneurs and start-ups,” Tsao said.

Similarly, Elixir Capital managing director Amir Azahar said there was strong potential for the group to tap into with its collaboration with Mavcap.

“With a population of over 1.7 billion Muslims across the globe, coupled with increasing connectivity and technology readiness, there is indeed strong potential in this industry which we can capitalise on, particularly in the emerging Digital Islamic Economy which is growing at a rapid rate,” he said.

Meanwhile, Mavcap said the RM70mil Axiata Digital Innovation Fund (ADIF), which was a collaboration between the group and telecommunications company Axiata Group Bhd had invested in four new companies, namely, Pixelated Sdn Bhd, KFit Asia Sdn Bhd, Softinn Solutions Sdn Bhd and VAV Apps Sdn Bhd

ADIF, which focused on technology companies in the digital services space, had to date invested in 10 companies, with more than RM22.9mil in funds being deployed.

This article was first published on The Star