This article first appeared in BusinessCircleKL.
Golden Gate Ventures, Singapore’s most established venture capital firm, today announced the opening its Malaysian office in Kuala Lumpur. Having already utilised a quarter of its Fund II in early-stage tech companies that are based in or operating in Malaysia, the firm now plans to invest another MYR75 million (US$18 million) to help back Malaysian based start-ups.
Golden Gate Ventures Managing Partner Vinnie Lauria explained that the firm’s expansion into Malaysia was done to solidify its on-the-ground presence there. “Several factors make this country an excellent place for technology start-ups”, said Lauria. “We already have good Malaysian tech companies in our portfolio and we want to find more.”
According to the company, Malaysia – as the second-most developed economy in ASEAN – noted that the country has strong fundamentals in place to sustainably grow its already-vigorous start-up scene, as it possesses the region’s highest rate of initial public offerings (IPOs) as well as high digital penetration.
“Malaysia’s rising middle class and business sectors are full of tech-savvy, mobile-savvy users who create demand for cutting-edge IT products and services,” Lauria noted. “Malaysia’s new government, after winning the historic elections this year, is another positive. People are now feeling more optimistic and that sentiment is extending to the business sphere.”
The firm also highlighted Malaysia’s diverse mix of ethnic and cultural influences as strategic. For Golden Gate Ventures Partner Justin Hall, this, alongside the nation’s consistently growing economy, makes it a microcosm of the greater Southeast Asian economy.
“With the diversity of its people, culture and economy; Malaysia is truly Asia, and thus makes it the perfect platform for businesses to expand across ASEAN, as the products and services created for this market can take advantage of the country’s built-in potential for scalability,” said Hall. “What this means for a start-up is that ‘if you can make it in Malaysia, you can make it anywhere in Southeast Asia.”
Malaysia is the third and latest location in Southeast Asia for Golden Gate Ventures, after Singapore and Indonesia. To date, the firm already has several innovative start-ups operating in Malaysia in its portfolio, which include: GoQuo (airline e-commerce and customer relations platforms), ServisHero (e-marketplace for finding home-repair and maintenance specialists), Carousell (C2C buying and selling), Codapay (mobile/online payment gateway) and Homage (home-based care-giving platform).
Gillian Tee, the CEO of Homage, explained that Golden Gate Ventures expansion into Malaysia has also coincided with her firm’s own entry into the market. “For start-ups like us, Malaysia is a natural market to expand to. The domestic ecosystem itself is so large and diverse that businesses find an increasingly deep opportunity and welcome market for their products and services” said Tee. “For Homage, we are looking at Malaysia to help support the local aged and meet their fast growing care needs. We see the signs and opportunities for aged care solutions to grow sustainably with collaborative support from stakeholders across the private and public sector.”
In addition to its regional expansion, Golden Gate Ventures recently closed a US$ 100 million Fund III and opened a special fund to invest in blockchain technologies and digital-currency start-ups. All the firm’s investments are made in early-stage companies that use IT as well as internet and mobile technologies, and the firm’s investing experience is supported by an advisory board that includes Facebook co-founder Eduardo Saverin.