Digital News Asia
Only 11 months into its founding as an accelerator aiming to identify promising startups and turbo charge their growth, ScaleUp Malaysia pulled off quite a coup last week. The opening of applications for its Cohort 2 was accompanied with the news that Singapore-based regional venture capital firm, Quest Ventures has committed to invest US$1 million from its new AsiaFund 2 that has raised US$30 million so far, into Malaysian startups from Cohort 2 that will launch next month.
To get a sense of how well ScaleUp Malaysia has done in the short period it has been in existence, you only have to hear from James Tan, founding partner of Quest Ventures and one of Singapore’s leading startup entrepreneurs, who actually cofounded an e-commerce startup in China in 2009, listed in on the Nasdaq in 2015 and exited in 2017.
Tan who founded Quest Ventures in 2011 as his vehicle for angel and corporate investments, tells DNA that his philosophy in investing is premised on the belief that the best deals in any market are ideally made by locals. “I really don’t think you can find a better team in Malaysia than the people who run ScaleUp Malaysia and that should help them attract the best startups as well,” he says, looking forward to working with StartUp Malaysia – “the best people we imagine working with.”
While Quest Ventures has partnerships in other markets as well, Tan notes that the engagement with ScaleUp Malaysia is deeper where Quest Ventures will work with the companies from Cohort 2 for a 12 week period during the first part of the programme and for another 21 months after this period. “We really appreciate this opportunity to work closely with the startup and ScaleUp Malaysia,” he says.
“I believe there is a lot of value in working with early stage companies,” says Tan who in working with ScaleUp Malaysia has had to be flexible and creative to accommodate the lower investments ScaleUp Malaysia makes. The RM250,000 that will be invested into each of the 12 startups translates to US$60,000, a significantly lower amount that the usual US$1 million cheques Quest Ventures is used to cutting.
A realistic Tan explains, “This partnership at least helps us get into the market here and we reserve the right to invest more into them later at our normal US$500,000 or US$1 million amount.” No doubt a remark that will get many entrepreneurs excited.
Meanwhile, eager to get started, Tan highlights Malaysia’s track record of producing regional champions, “even if some of them end up in Singapore” and says, investing into the country’s startups is “a no-brainer”.