The venture penetration rate, which refers to the proportion of venture capital investment relative to the country’s gross domestic product (GDP), is projected to be about $1.4 billion at the targeted 0.35%, compared to the 2022 figure of $758 million.
The implementation of the road map will be headed by Malaysia Venture Capital Management Bhd (MAVCAP), which is one of the country’s government-backed VC agencies and the agency tasked to develop the country’s VC sector back in 2001.
It also benchmarks itself Malaysia against country’s such as Indonesia and South Korea.
In Malaysia, public sector funding accounted for 10.1% of the total funding in 2018, which increased to 29.1% in 2022. MAVCAP’s data showed that in contrast, Indonesia’s public sector funding dropped from 32.8% to 15.6% during the same period, while South Korea’s shrunk from 6.8% to 2.5%.
Malaysia seeks to follow suit in reducing its local industry’s dependence of government funding and instead attract greater contribution of private capital.
MAVCAP noted, however, that Malaysia’s private sector funding value has increased, with a compound annual growth rate (CAGR) of 35.8% from 2018 to 2022. In the same time period, the agency’s data showed that Singapore’s private sector funding CAGR grew at a lesser rate of 13.7%, while Indonesia’s rose by 5.9%.
“Keep in mind that this roadmap is only 10% of [the work that needs to be done], the [remaining] 90% depends on how to execute [it],” said MAVCAP CEO Shahril Anas during the roadmap’s launch yesterday.
Insiders have previously noted to DealStreetAsia that the country has sometimes struggled to execute on exciting policies.Other instituitions that were named to be working on the country’s central bank Bank Negara Malaysia, and soverign wealth fund Khazanah Nasional Berhad, among others.
Last October, the government announced that it would be putting MAVCAP and another government-owned VC agency, Penjana Kapital, under Khazanah, which was said to still be under progress.
