Malaysia’s Government and Private Sector Unite to Boost Malaysia’s VC Scene

The 2024 Malaysia Venture Forum opened on Tuesday, gathering key public and private figures to explore the future of Malaysia’s venture capital (VC) ecosystem. The forum was officially launched by Datuk Seri Amir Hamzah Azizan, Malaysia’s Finance Minister II, who talked about the crucial role of venture capital in driving innovation, economic growth, and generating employment opportunities.

In his speech, Hamzah Azizan pointed out the need for a more diversified venture capital landscape in Malaysia, which remains heavily dependent on government-related sources. In 2022, nearly two-thirds (63%) of total VC funding came from government agencies and sovereign wealth funds. The government plans to simplify cross-border financial approvals to enhance Malaysia’s competitiveness and attract foreign venture capital, ensuring efficient fund flows aligned with their mandates.

The Minister stressed that a diversified funding ecosystem is crucial for Malaysia’s venture capital future. This requires contributions from government-linked investment companies (GLICs), private-sector investors, and startups. He called for greater participation from private sector investors to inject fresh capital and provide market-driven insights, complementing the funding and guidance from GLICs. In turn, startups must develop strong business models that attract local and international investors.

Under the 2025 Budget, the Ministry of Finance has allocated MYR 200 million for the Dana Perintis fund under KWAP and MYR 65 million for The Cradle Fund to help startups scale regionally and globally. Additionally, Jelawang Capital, a national fund of funds, is set to deploy MYR 300 million in 2025 to further fuel startup growth.

Despite the optimistic outlook, the Finance Minister acknowledged the inherent risks in the venture capital space. Investments in innovation-driven businesses are inherently high-risk, and not all ventures will succeed. However, he stated that these setbacks should be seen as learning opportunities to refine governance and strategy, ensuring that the ecosystem remains dynamic and resilient. 

Malaysia can build a self-sustaining venture capital landscape through collaboration and a proactive approach from all stakeholders to drive the country’s economic transformation.

Ng Sai Kit, Chairman of the Malaysian Venture Capital and Private Equity Association (MVCA), is optimistic about the future of Malaysia’s venture capital (VC) industry, acknowledging its potential despite its smaller size. 

He highlighted the depth of Malaysia’s capital markets and its established legal frameworks as key advantages, though he emphasized that more progress is needed. The MVCA commended the government’s commitment to regulatory reforms and capacity building as part of the Malaysia Venture Capital Roadmap (MVCR). The association looks forward to continuing its collaboration with both the private and public sectors to enhance the vibrancy of the country’s VC ecosystem.

Amir Hamzah urged a collective, whole-of-nation approach to building a thriving venture capital environment. While acknowledging venture capital’s inherent risks, the Minister said these should be seen as opportunities to strengthen governance frameworks and refine strategies. 

He stated the government’s steadfast support for the VC ecosystem, encouraging stakeholders to have confidence in Malaysia’s institutions as they balance risk-taking with sound governance, in line with the broader goals of the Madani economic framework.