PETALING JAYA – Malaysian startups should adopt a global mindset and tap into international markets from the beginning of their operations, said Selangor industry and trade executive councillor Datuk Teng Chang Khim.
During the Selangor Startup Day conference organised by the Selangor Information Technology & Digital Economy Corporation (Sidec) today, Teng said that while Malaysia offers numerous advantages for startup businesses, there are also various barriers that could impede their growth.
“It is evident that rapid scalability is a defining characteristic of startups,” he said in his speech at the conference.
“Relying solely on our domestic market is insufficient for startups to achieve true scale or attain unicorn status.”
Teng emphasised the imperative for local startups to expand into foreign markets from the outset.
Unicorn status in the finance industry requires private startup companies to have a valuation of at least US$1 billion (RM4.6 billion), spanning technology hubs worldwide.
Teng identified Malaysia's strategic location within the fast-growing Southeast Asian region and its cultural ties with neighbouring countries as significant advantages.
He also acknowledged that the nation possesses a solid foundation to support the growth of startup ecosystems, with well-established physical and digital infrastructure.
However, Teng cautioned against disregarding the challenges faced by the ecosystem, which include lack of support and private sector-driven funding, talent shortages in the digital sector, absence of sustainable environment policies, and difficulties in accessing cross-border market penetration.
Low risk appetite?
During a press conference, participants of the 2023 SelectUSA Investment Summit highlighted notable differences between Malaysian venture capitalists (VC) and their Western counterparts, particularly in their approach to uncertainty.
Sharma Lachu, the founder of Accendo Technologies, noted that Malaysian VCs exhibited a lack of “risk appetite”, often preferring to invest in low-risk industries with the aim of maximising returns.
Similarly, Gil Carmo, founder of iMotorbike, expressed the opinion that Malaysian VCs are risk-averse and tend to avoid funding research and development industries, which could potentially drive the nation’s progress.
Meanwhile, Sidec’s chief executive officer, Yong Kai Ping, reported that participating companies had a productive summit and received positive feedback from American-based VCs.
However, Yong said that securing funding cannot be achieved through a single trip; rather, companies must establish trust with VCs.
Yong expressed hope that more firms would participate in future summits, where they could be grouped into biotechnology and artificial intelligence teams. – The Vibes, June 8, 2023
