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KUALA LUMPUR: Antler, the world’s most-active venture capital (VC) firm, is betting big on the Malaysian startup scene.
A day after launching the first cohort of 65 startup founders in Malaysia, Antler founder and chief executive officer Magnus Grimeland said “this is the best time to build a startup in Malaysia”.
Speaking exclusively to StarBiz, Grimeland noted that there has been a renewed focus on innovation in the country over the last few years, accelerated by the government’s proactive policy approach.
“This would drive the next wave of growth and it has a tremendous knock-on effect on the overall economy,” he said, adding that Khazanah Nasional Bhd has been playing an important role in creating a more accommodative environment for high potential companies.
Grimeland, the co-founder of ZALORA.com, Asia’s largest fashion eCommerce company, spoke on the sidelines of Khazanah Megatrends Forum 2023.
The investor also applauded Malaysia’s continuous efforts to build a “full-stack” capital ecosystem, which allows a company to access capital locally as it expands, without having to relocate to another country.
In the past, the previous governments have been criticised for not developing the private equity (PE) and VC markets adequately, resulting in companies like e-hailing provider Grab shifting its headquarters to Singapore.
“One thing I like about Malaysia is that the country is willing to learn about its weaknesses and is ready to rectify.
“I spoke to the minister (Tengku Datuk Seri Zafrul Abdul Aziz) and he asked us how Malaysia can do better, which I really appreciate,” said Grimeland.
In order to create successful startups, Grimeland said a country needs to focus on three areas.
“Firstly, the country needs to be a place where you can combine the best of local and global talent. This is one area that Singapore has done very well but Malaysia has also arguably done it well.
“Secondly, the government needs to ensure that it is easy to set up a business and that there is good rule of law. If there is any arbitration or people disagree about a contract, that issue can be resolved rapidly.
“That has improved massively in the last 10 years (in Malaysia).
“Thirdly, a country needs a full-stack capital ecosystem. There needs to be local capital that businesses can tap into as they scale up,” he added.
Looking ahead, Grimeland said the government should partner with the best private players such as successful VC and PE firms and allow them to do “what they are great at”.
“The partnership between Khazanah and Antler is a great example.
“We have a large global network and we have great people who can identify the best founders with great business ideas, including in Malaysia.
“We groom these aspiring entrepreneurs from the pre-seed stage and we bring them to different levels of funding as they scale up.
“If the government tries to do everything in-house, then it is very difficult to be the best in the world,” he said.
At some point, Grimeland opined that the ecosystem will be sustainable on its own, without the need for a prolonged hand-holding by the government.
Malaysia’s sovereign wealth fund Khazanah has allocated RM6bil under its “Dana Impak” to increase the nation’s competitiveness and to build national resilience.
Among the programmes that were launched under Dana Impak is the Future Malaysia Programme which seeks to invest in the Malaysian venture ecosystem.
Speaking at the Khazanah Megatrends Forum 2023 on Monday, Khazanah Nasional managing director Datuk Amirul Feisal Wan Zahir highlighted the importance of various stakeholders in the economy to collaborate.
This includes private companies, the government, regulators, fund managers, non-governmental organisations and academia.
Amirul Feisal also noted that it is “borderline absurd” to assume Khazanah is fit to invest all along the venture spectrum.
“As such, we work with partners such as 500 Global, Gobi, Antler, Plug and Play, PETRONAS Ventures and more to ensure that we take a holistic approach in the value chain,” according to him.
Grimeland was positive on the collaboration and felt that the next two to three years will be a “golden period” for Malaysia.
However, Grimeland urged aspiring entrepreneurs to “think bigger and internationally from Day One”, describing it the biggest weakness of Malaysian startups.
“Malaysian startup founders must have the gameplan to expand their businesses in South-East Asia or internationally,” he said.
When asked about his advice to aspiring entrepreneurs in Malaysia, Grimeland said it is important to know one’s strengths and how to leverage them.
“Secondly, you must have great co-founders in your startup. The biggest asset is not the capital but the co-founders. Go out and meet people to scout for the best co-founders.
“Thirdly, you must validate your business model by talking to stakeholders such as customers. Only then you know whether you are on the right track,” he said.
Like it or not, Grimeland said startup founders must leave their pride behind in developing their business.
“You must go into a business with a mindset that you cannot afford to fail,” he added.
On Oct 2, Antler announced its first cohort of founders in Malaysia. Out of the final list of 65 founders, 78% of them are Malaysians and 37% are females.
During the 10-week in-person programme run out of Kuala Lumpur, founders get support from the pre-idea, pre-team stage with co-founder matching, deep business model validation, initial capital, expansion support and the possibility of follow-on funding at a later stage.
Antler plans to have three cohorts every year, with about 200 to 300 founders altogether.
“The founders may team up together or work with someone from outside.
“On average, we end up backing 40% of the teams with capital,” Grimeland explained.
Commenting on his experience as a first-time speaker at the Khazanah Megatrends Forum 2023, Grimeland described it as “incredible”.
“It was great to see a diverse range of speakers that combined locals and foreign experts including from the United States, Europe and China,” he said.
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