Becoming a global hub for startups
MALAYSIAN Global Innovation and Creativity Centre (MaGIC) continues to push Malaysia as a hub for startups and their investors after the success of its previous accelerator programmes’ participants in raising funds.
MaGIC chief executive officer Ashran Ghazi says its latest initiative, the Global Accelerator Programme (GAP), would further strengthen Malaysia’s position as the gateway for entrepreneurs looking to penetrate the Asean region. GAP also paves the way for MaGIC to be a global organisation.
The previous three accelerator cohorts by MaGIC raised over RM224mil in funding from local institutions and foreign investors.
GAP, which was open to both local and foreign startups, received 947 applications from 47 countries and narrowed them down to 56 startups, of which 70% are from Malaysia and the remaining 30% from 10 other countries.
While most of the participating startups are based in Malaysia, Ashran says it is not sustainable to impose conditions requiring companies to be based in the country.
Asked about staving off a brain drain should startups opt to relocate, he replies that MaGIC works with other government agencies like Malaysia Digital Economy Corporation (MDEC) to provide programmes and incentives for participants to set up their bases in Malaysia.
MaGIC’s previous accelerator programmes drew in 225 local and international participants, of which 126 or 56% were based in Malaysia.
Ashran notes that some 31 (14%) of the 225 participants have since shut down their startups.
MaGIC chairman Tan Sri Mohd Irwan Serigar Abdullah adds that having too many regulatory bodies in Malaysia could make it difficult for startups to innovate and be a step back for innovation. However, Mohd Irwan, who is also Treasury secretary-general, disagrees that there should be a move to deregulate more industries. Existing laws just need to be updated and made clearer, he says.
“Regulators need to move faster, regulation needs to suit the changing world,” he says, adding that clear regulations in fields like Financial Technology (FinTech) would encourage more companies to set up in Malaysia.
MaGIC executive director (entrepreneurship development) Jonathan Lee says GAP would aid participants in addressing regulatory issues by connecting the startups with various regulatory bodies and ministries as well as provide access to mentors, which include industry experts and lawyers.
Lee expects more FinTech companies to participate in its accelerator programme given how popular the vertical was becoming.
Asked if the current lower participation from FinTech companies was due to Bank Negara’s strict regulations, Lee disagrees.
He says the FinTech sandbox was only established last year and private banks’ interest in the sector suggests that the industry was receptive of FinTechs. Nonetheless, the FinTech companies themselves may not be ready to come forward.
Currently only three GAP participants are FinTech: mortgage management platform MHUB, money lending service Direct Lending and currency exchange service SwapIt.
The programme selected 56 startups from nine industry verticals, namely creative and lifestyle (45%), mobile (16%), healthcare (15%), smart cities (5%), e-commerce (4%), education (4%), finance (4%), social innovation (4%) and supply chain (3%).
Other companies participating in the four-month programme include insurance technology players CoverGo and MedKad, concert crowdfunder KonserKu, online wetmarket PasarTap and online lawyer booking service CanLaw.
Prime Minister Datuk Seri Najib Tun Razak announced GAP during the Global Entrepreneurship Community conference last year, saying the programme would help create interconnectivity within the ecosystem through collaboration between global and local startups.