Half of RM300 mln Hibiscus Fund allocated for Malaysian tech start-ups

KUALA LUMPUR: Venture capital firm, RHL Ventures Sdn Bhd (RHL) aims to fully distribute the Hibiscus Fund which is expected to close at around RM300 million this year, half of which to be set aside for Malaysian technology-linked start-ups.

RHL co-founder and managing partner, Rachel Lau said Malaysia is seen to be an appealing market in terms of risks and rewards.

“We are looking to set up and support innovative private technology companies that have the potential to disrupt and transform markets as we move forward, as technology allows businesses to grow exponentially and create a synergistic ecosystem in which everyone benefits from the value they create,” she told Bernama in an email interview recently.

Lau said since its inception in 2016, RHL has been focusing on Southeast Asian technology space.

“We have seen many deserving and innovative technology companies in the private market that would benefit greatly from timely access to capital, network and mentorship,” she said.

Search for investment opportunities in healthtech, edutech, fintech sectors

Lau said currently, the company is specifically looking into investment opportunities in sectors such as healthtech, edutech and fintech, as well as consumer-related companies that prioritise innovation and growth while disrupting existing business models.

“Among the key areas that we are currently looking at are food safety, security and sustainability, empowering women entrepreneurs and the economy, good company governance structure in startups, as well as agritech,” she said.

Managed by RHL and South Korea’s KB Investment, the Hibiscus Fund is a venture capital fund that forms part of the Malaysian government’s Dana Penjana Nasional (DPN) Programme, where half of the fund is contributed by private investors and the balance through a ringgit-for-ringgit match by the government.

The fund’s main objective is to accelerate Malaysia’s economic recovery by digitalising Malaysian businesses through innovation from various stage companies and start-ups, particularly in the Series A and Series B stages.

RHL on track to complete two more deals under Hibiscus Fund in coming weeks

Under the Hibiscus Fund, Lau said RHL had successfully closed nine deals in 2021 and one at the beginning of 2022, and is looking to complete two more deals in the coming weeks.

She noted that a majority of them were tech start-ups with great potential and innovative solutions.

Lau said that to-date, RHL has more than RM500 million in assets under management (AUM).

With the combination of the anticipated RM300 million in the Hibiscus fund, the firm’s AUM is expected to reach RM1 billion in the next five years.

“We have invested in more than 30 companies over the past couple of years and look to distribute a meaningful amount of capital in 2022,” she said, adding that the company’s goal for 2022 is to invest in about 2530 companies.