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Over the past decade, players in Malaysia’s startup ecosystem have been wondering: when will we get our first Malaysia-based unicorn?

Then in 2021, there was a sudden shift and we found ourselves home to 3 unicorns, namely Carsome, AirAsia Digital, and edotco Group.

But does this really mean that Malaysia is poised to grow more unicorns? From the responses we’ve seen to the MyDIGITAL blueprint, there’s still a lot of scepticism over whether our government agencies can actually hit the outlined goals.

For a brief introduction, some of MyDIGITAL’s goals include creating 5K new companies, growing or attracting 5 unicorns, and digitalising 875K MSMEs and SMEs by 2030.

During a panel discussion at Wild Digital SEA 2021, we had the pleasure of listening to Gopi Ganesalingam, Chief Digital Industry Officer at Malaysia Digital Economy Corporation (MDEC), and Rafiza Ghazali, Group CEO of Cradle Fund explain MyDIGITAL’s goals in more depth and address several questions from the startup community.

The session was moderated by Dash Dhakshinamoorthy, founder of accelerator StartupMalaysia, who shared his own input throughout.

Did you know: In 2013, the term “unicorn” came into being thanks to Aileen Lee, founder of Cowboy Ventures, a seed stage venture capital firm. Unicorns are used to describe startup companies that are valued at US$1 billion, and they’re usually tech startups. As of November 2021, CB Insights reported that there are more than 800 unicorns around the world.

Why is Malaysia pursuing the creation of unicorns?

The virtual stage at Wild Digital SEA 2021

Gopi took the virtual stage first, stating that unicorns are important not just by definition, but because of what they represent. They’re larger companies, which are important in any ecosystem.

“And if you look at unicorns, the spill-over effect is the job creations, the supply chain—the ecosystem a unicorn brings together.”

He later quoted a Startup Genome report that revealed a unicorn increases the value of an ecosystem by 10x.

Editor’s Note: The sentence above has been edited to reflect Gopi’s intended statement more accurately.

Rafiza pitched in with her own two cents, stating that unicorns could also inspire budding entrepreneurs and growing startups to keep going. Hearing this, Dash likened it to how humankind sending a few people to the moon helped grow the world’s aerospace industry.

Can our government agencies get their act together in pursuit of this goal?

Prior to MyDIGITAL, Gopi admitted that government agencies involved in the startup ecosystem tended to work independently, albeit being just a phone call away from one another for any discussions.

But now, the blueprint has united these agencies to leverage each of their strengths to create the desired “right” ecosystem for breeding unicorns. It’s no longer just each agency chasing its own KPIs, instead, they’re coming together in pursuit of a national goal.

Rafiza agreed, saying that though she’s technically the new kid on the block, she’s been observing Malaysia’s startup ecosystem for a long time and feels as though this is the first time that she’s seeing all the agencies really communicating and working with one another.

Does Malaysia have the funds needed to breed unicorns?

Based on the speakers’ sharing, it appears that funding is not a concern as both MDEC and Cradle Fund said that the government has been putting in a lot of effort to ensure the ecosystem is well-funded.

A brief overview of Dana PENJANA Nasional / Image Credit: Penjana Kapital

Just last year, Penjana Kapital was incorporated as a government company to operationalise the Dana PENJANA Nasional (DPN) programme. By June 2021, it had raised RM850 million, exceeding the target of RM288 million by 3.7x. Of the total raised, 55% was also from foreign investors.

Other government agencies are also trying to promote Malaysian startups going abroad and outside venture capitalists (VCs) coming to Malaysia.

But Malaysia lacks talents, right?

Dash brought up that in his discussions with several startups over the pandemic, he learnt that they felt talents were scarce and costly to acquire. Without talents, it’d be nigh impossible to breed our unicorns. What then could be done to address this issue?

Just shy of disagreeing, Gopi clarified, “I joined MDEC in 2015 and I’ve always noted the fact that Malaysia has lots of talent, whether that’s entrepreneurial talent or talents that support entrepreneurs.”

“Malaysia is a small country, but if you just take one sector like the banking and financial institutions, if you go out of ASEAN, a lot of the major players that support the banks are Malaysian companies.”

So, the truth of the matter is that we produce good talent, but we don’t retain them very well. We also don’t retain our entrepreneurs very well. Coming back to the blueprint, that is exactly what it is trying to address.

Gopi Ganesalingam, Chief Digital Industry Officer at MDEC.

Rafiza also supplied, “We have the talent, but they’re not necessarily in Malaysia.” Despite this, she’s had people reaching out to her to learn how they could contribute to and support Malaysian agencies and companies while overseas.

From this, she concluded that because everything is now digital, talents don’t necessarily have to be in Malaysia to get involved in our ecosystem.

Adding on to this point, Gopi said, “So, you can get talent from anywhere, even the best talent—if you can afford them—through any platforms.”

He’s also aware that some larger companies were now beginning to pay a lot more for fresh graduates, giving good candidates an incentive to stay.

What metrics are we using to ensure Malaysia will become a breeding ground for unicorns?

  1. Creating of 5K new startups that have a working commercial model.
  2. Increasing the valuation of startups so we can hit our target of 5 unicorns.
  3. Digitalising 875K MSMEs and SMEs.
  4. Achieving the goal of RM70 billion in digital investments.

That’s according to Gopi, on behalf of MDEC. In essence, the MyDIGITAL blueprint is akin to a report card, and MDEC, Cradle Fund, and other agencies are working to hit the targets in it.

On the other hand, Cradle Fund has its own 3 metrics that it’s been closely monitoring for each of its grant recipients.

First would be the job creation potential of each recipient, and secondly, Cradle Fund looks at a startup’s potential for further funding to assess its longevity. Rafiza was glad to share that out of all the Sendirian Berhad companies they’ve helped so far, 8/10 are still around.

Thirdly, they look at a company’s contribution to the GDP. Rafiza shared that the organisation’s track record shows that the job creation multiplier for every grant recipient stands at a minimum of 7.36x (even excluding the gig economy and Grab, whom Rafiza called an “outlier”).

Meanwhile, for every Ringgit of a grant provided by Cradle Fund, a recipient’s GDP contribution is multiplied by 3.35x. “So, for every RM500K [in grants], we get a GDP contribution of RM1.5 million,” Rafiza said.

How will government agencies work with private stakeholders to build a unicorn-breeding ecosystem?

As of now, a lot of information about and for Malaysian startups is greatly fragmented. To compile a list of every Malaysian startup in existence or figure out how to launch your own Malaysian startup, you’d likely have to sift through tons of sites without full assurance that you’re fed the right information.

This is why Cradle Fund was allocated RM20 million to start the MYStartup platform which should address these pain points. It will be a collaborative platform that public and private agencies can pitch in to share data.

“It will save time for startup founders to focus on running their business and will allow them to find IP lawyers, investors, support, mentors, jobseekers, etc.,” Rafiza added. By the end of November, we could expect to see an MVP of the site.

On MDEC’s part, the agency has already been running a variety of programmes to close the gap between itself and startups. Some examples include the 22 Digital Hubs, working with accelerators to hold hackathons, fundraisers, Founders Grindstone programmes, and more.

Gopi said that they’ve seen results with all these, so MDEC will continue to develop and enhance such initiatives.


The sharing in this panel by Gopi and Rafiza definitely gave more context to and insights into why Malaysia is pursuing the creation of unicorns, and how it plans to do so.

I think we are poised to really catapult the ecosystem and build not just more unicorns but resilient, global, investable, quality startups. We have the talent, we have the people, we have what it takes, all the secret recipes to build the ecosystem. So, it’s just whether or not we have the heart, soul, and faith to execute all these.

Rafiza Ghazali, CEO of Cradle Fund

Now, the Malaysian startup ecosystem and its stakeholders will wait with bated breath to see how all the goals laid out will be executed. What results will we see over the next 4-9 years?  

  • You can read more about the MyDIGITAL blueprint here.
  • Read Malaysian startup stories here.

Featured Image Credit: Gopi Ganesalingam / Rafiza Ghazali

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Vulcan Post aims to be the knowledge hub of Singapore and Malaysia.

© 2021 GRVTY Media Pte. Ltd.
(UEN 201431998C.)