KUALA LUMPUR: Cyberview recently hosted a webinar on challenges and opportunities on funding for start-ups on their journey towards commercialisation during Covid-19.
Titled ‘Financing the Future: Investing in Creating and Building Digital Business Models’, the webinar focuses on investments and financing strategies for companie. It also looked at how the pandemic has paved a way for innovation.
A study conducted by Forrester in 2020 has discovered that Covid-19 has encouraged 34 per cent of Malaysian firms to kick off their digital transformation journey since innovation is becoming the reason for one’s success.
Even though innovation can bring an optimistic future to business transformation, some factors would make it otherwise, which include lack of support, funding, and skills.
The panelists include Business and Technology Advisory’s (BTA) vice president and Division of Malaysia Debt Venture (MDV), Zuhry Rashid; Pandai Education Sdn Bhd’s chief executive officer, Khairul Anwar Mohamad Zaki, and Technology Hub Division of Cyberview’s head, Shafinaz Salim.
“Venture financing as offered by Malaysia Debt Ventures can support start-ups to pivot quickly and stay differentiated in today’s competitive, fast-moving market. On top of funding, start-ups can fast-track their commercialisation efforts by leveraging Cyberjaya’s collaborative ecosystem and living lab opportunities. It is a powerful vehicle that can open up opportunities for innovators to convert ideas to viable products,” said Shafinaz.
“Start-ups are reliant on investors like venture capital investments as well as the support of government and relevant agencies for grants, seed capital, or soft loans. This structure can be complex for start-ups to comprehend, who usually have intangible business models, are digital-centric and are without any assets,” she said.
MDV is strategically positioned where our venture financing for start-ups is not only compatible to standards of the matured market but provides a unique, flexible, and balanced structure for companies without dilution of their equity, lending to a higher valuation,” said Zuhry on MDV’s role in filling the gaps of the country’s current financing ecosystem.
“Compared to global markets, many start-ups in Malaysia had already actively seeking or raising funds before the pandemic. When the pandemic hit, the funding efforts slowed as well. During this time, many start-ups were met with challenges including depleting marketing funds, slowing customer acquisition, changes in the working capital requirements, among others,” he said.
“However, the situation is now seeing positive traction with start-ups securing new rounds of funding. Investors are also more active and aggressive now and have started looking at alternative asset classes that are robust, innovative, and have digital access, instead of usual conservative types,” he added.
Khairul, meanwhile, shared some insights on how companies should operate through the available options.
“For early-stage companies that are seeking grants or funding, it is important to showcase the people behind the company, highlight their credentials, expertise, and passion as well as share key learnings and insights from industry to drive investor confidence. Start-ups also need to understand that funds are often not dispensed upfront, there are milestones and deliverables to meet before they can be secured,” he said.
“Fund disbursement also takes time; therefore, it is important to be conservative with your projection and set aside revenue if required. In some cases, funds can only be claimed after the execution, meaning start-ups will need to fork out their cash first,” he added.
–NST