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Funding Facilitation
by MDeC
2nd October 2012
MIRC Funding Forum 2012
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About MSC Malaysia
MSC Malaysia is Malaysias
national ICT initiative developed to:
1
3
2
Revolutionise the ICT
industry in Malaysia
Increase the ICT industrys
contribution to the Malaysian
economy via exports
Position Malaysia as a
vibrant hub for ICT
investments
MSC Malaysia
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1
2
A one-stop agency under Ministry
Of Science, Technology &
Innovation, (MOSTI), focused onfacilitating the success of MSC
Malaysia and the companies
operating in it
MDeC also advises the MalaysianGovernment on legislation and policies
with respect to ICT matters
Multimedia Development Corporation Sdn Bhd
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Information Technology (INFOTECH)
Study, design , development, implementation, technical services or
support, marketing and management of computing based
information system
Creative Multimedia Cluster (CMC)
Multimedia content designing of computer based media including
text, graphic, sound, animation, photo images and video
Global Sourcing Cluster (GSC)
Captive & Outsourcing in 5 main areas - Banking, Financial Services &
Insurance (BFSI), ICT, Pharmaceutical & Health, Logistics &
Transportation and Energy, Chemical & Resources
MSC Malaysia Clusters
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Ideas Preseed Seed Start-up
EarlyGrowth/
Growth
Expansion/ IPO
Funding Value Chain
Current
Funding
Scenarios
(Source:
BNM Blue
Print 20112020)
3Fs/ Grants
Angels
VC, Banks, PEs, Institutional Investors
Listing
1. 58 Venture Capital Corporations (VCCs) but less than 10 VCCs are active
2. Angel investments are based on Ad-hoc inner circle network, Not structured and No
Syndication
3. Banks Schemes slow in recognising IP assets as part of the financing regime -normally require up to 30% of the loan in hard collateral
4. Private Equities (PEs) require strong/high growth & high ROI/IRR
5. Difficulty in getting financing, companies rely on grants and self-funding
Funding Ecosystem Current Situational Analysis
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Strong dependency on grants
Difficulty to secure bank loans
Lack of financial planning
Unable to generate/procure funds
Soft deal flow (not innovative)
Unable to assess or correctly value
Exit strategy Scalability of deals & limited market
access
Lack of incentives by the Government
Funding Issues From Companies & Funders
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1. The issue of getting funding and financial assistance is and has been an issue faced by
Companies.
2. However the issue of funding is bigger and more pertinent than merely getting funds,
which has resulted in MDeC establishing several initiatives over the years, namely
i. Grant programmes such as; Pre-Seed, ICON, MGS, BCI2ii. MSC Malaysia InnoTech, which is the private capital raising platform.
In 2012, MDeC through the Innovation Capital is looking into the funding ecosystem and to
identify the gaps and opportunities as well as drawing up a strategy in managing the gapsand improving on the current funding ecosystem.
Funding Facilitation by MDeC
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Equity Financing Project Financing Debt Financing
In Progress
Funding Facilitation & Platforms
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Business Angel Venture Capital Private Equity
Stage of Company Start-up Growth Expansion
Business is born and
now exists legally.
Products or services
are in production and
you have your firstcustomers
Revenues and
customers are
increasing with many
new opportunities.
Profits are strong, butcompetition is
surfacing.
This stage is often the
choice of the small
business owner to
gain a larger market
share and find newrevenue and profit
channels.
Platform BA Platform MSC Malaysia
InnoTech
PE Platform
Collaboration
Partner
1. PIKOM Angel
Chapter (PAC)
2. Virtuous Investment
Cycle (ViC)
3. BANSEA
MAVCAP, local and
regional VCs
CMS Opus
Pembangunan Ekuiti
Quantum RM500k - 2mil RM2mil 5mil > RM5mil
Equity Financing
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MSC Malaysia InnoTech
has been recognized as a Malaysian Venture Capital pitching
platform (for ICT).
secured deals generated from Venture Capitals and Business
Angels worth more than RM 60 mil and has successfully fundedmore than 50 companies from 2008 until 2011.
MSC Malaysia was awarded Contributor of the Venture
Capital Industry by Malaysian Venture Capital Association
(MVCA) for MSC Malaysia InnoTech.
MSC Malaysia InnoTech
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QualifyPitch
Platform
Deal
Opportunities
MonitorDevelop
MSC Malaysia InnoTech The Flow
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Knowledge Sharing Seminar on From the View of
Investor: How To Size Up Business Opportunities in
China?, 31st October 2012
MSC Malaysia InnoTech Creative Multimedia, in
November 2012
PIKOM-MSC Malaysia InnoTech, in November 2012
MSC Malaysia InnoTech - Upcoming Programme
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Existing platform:
Collaboration with Malaysian Debt Ventures Berhad
(MDV)
MDV-MSC Malaysia ICT Adoption Financing Programme Loan Size: RM0.25mil to RM2mil
Financing Rate (MDV lending rate): 0.25%
Project Financing
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Debt financing takes the form of loans that must be repaid over time,
usually with interest.
Progress:
Workshop for Financial Institutions (FIs) Workshop was organized by
Bank Negara Malaysia in July 2012, in collaboration with MDeC, SME
Corp and 3 major associations for banks in Malaysia.
To educate the funders (i.e. bankers) to assess business based on cash
projections rather than collateral-based
Currently working with Credit Guarantee Corporation (CGC), Development
Financial Institutions (DFIs) and commercial banks
Debt FinancingIn
Progress
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StrengthenIncubation
Ecosystem
IncubationVirtualisation
Model
HolisticIncubation
Development
Incubation & Entrepreneurship
More platforms through
partnerships for capability
enhancement &
networking, i.e. TOD with
MAD incubator, SVC2M
with StartupMalaysia.org
Collaboration model for
incubators to provide
more virtual services to
incubatees /
entrepreneurs for bigger
reach & non-physical
bound
More programmes for
entrepreneur
accelerator initiatives
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More than 100 organisations
participated in development lab
Increase
Buyers trust
& confidence
Reduce cycle
time forpurchasingdecision
Encourage
developmentof quality
solutions
Spur demand
for local
products
Process
Assessment
Product
Evaluation
13 main criterias
76 sub-criterias
403 questions
Our assurance:
To Create a Quality Image towards
Malaysian made ICT products
MSC Malaysia Certified Solutions
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Presented byIr. Dr. Karl Ng
Director, Innovation Capital
Multimedia Development Corporation (MDeC)
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