As we’ve heard time and time again, SMEs make up a huge part of Malaysia’s economy, generating about 38.2% of our country’s GDP.
However, many smaller businesses may not be well-informed about the financing opportunities that are available to them, such as through capital markets.
Addressing this information gap is Elevate Programme. Launched by Capital Markets Malaysia (CMM) with the support of the Securities Commission Malaysia (SC) and Bursa Malaysia, this programme aims to help businesses successfully fundraise through the capital market and prepare for the next stage of growth.
CMM was set up by the SC in 2012 to strengthen its internationalisation agenda for Malaysia’s capital markets.
The capital market refers to a venue where savings and investments are channeled between suppliers and those in need of capital, typically involving the trade of stocks, bonds, currencies, and other financial assets.
These suppliers could be accessed through the public market by listing on the stock exchange, i.e. Bursa Malaysia’s LEAP, ACE, or Main Market.
There’s also the private market, which has channels such as venture capital, private equity, and equity crowdfunding.
For its first cohort, which will start in May 2024, Elevate Programme is inviting 15 high-growth SMEs, and registrations are currently open until April 8, 2024.
Specifically, the programme wants SMEs or mid-tier companies (MTC) that demonstrate a year-on-year increase in revenue and profitability over three years, and must exhibit an annual revenue of at least RM5 million through valid documentation.
Bridging SMEs to the right financing solutions
For businesses to list on the Main or ACE Market, they are required to be more structured and visible to potential investors and financial intermediaries.
Thus, Elevate Programme seeks to lay the foundation for businesses to meet governance requirements and prepare organisations for the nuances of fundraising through the capital market.
Moreover, the four-month executive leadership programme will prepare senior leadership to inculcate an innovation mindset, to strengthen their business models, and to learn to articulate a vision of growth.
“We recognise that while most SMEs are well-versed with how to obtain bank loans, some are not aware of the availability and breadth of capital market funding options in Malaysia,” Navina Balasingam, the general manager of Capital Markets Malaysia, shared with Vulcan Post.
She also clarified that aim of the programme is not solely to encourage listing on the exchange. This is as they recognise that funding instruments such as equity crowdfunding, venture capital, and private equity are well-suited to the capital needs of SMEs.
Rather, the programme seeks to introduce companies to the possibilities in financing options available and guide them towards the avenues best suited for their growth needs.
This is as MTCs and SMEs may not have had the benefit of the counsel or network to help them determine what the most efficient capital raising route for them is.
“The programme is designed to prepare companies to access the capital market but ultimately the issuer must decide on the optimal funding solution based on their own assessments,” Navina said.
Developing the leaders at the top
While the programme will be organised over the duration of four months, it’ll actually only involve 10 days of activities.
“For senior leadership within small and rapidly growing businesses, taking ten days out of an already busy schedule can be challenging,” Navina explained.
Plus, the team also wanted to ensure that business owners had time to self-study and prepare, using the knowledge gained from the programme.
The programme will be conducted in three phases:
- Reinforcing business foundations to support growth through modules on design thinking, evaluating funding options, and developing a pitch/equity story
- Developing strategic considerations on the most ideal funding options including ESG disclosures and requirements, as well as branding and marketing as part of the business strategy
- Capital raising planning whether it’s through IPO, PE, VC, or other methods by finetuning the business plan and equity story, implementing structures, and internal controls to ensure a successful funding exercise
At the end of the four months, there will be a final Demo Day or Pitch Day, which serves as an opportunity for the participating companies to pitch their story to the investors using the skills and strategies they have built throughout the programme.
Here, they will be exposed to a panel of investors including investment bankers, venture capitalists, private equity investors, and equity crowdfunding platform operators.
Elevating the whole Malaysian business landscape
The Elevate Programme was first introduced in 2020 for MTCs preparing to enter the capital markets. But now, CMM has expanded the eligibility criteria, broadening its reach for SMEs to join as well.
The programme is industry agnostic, meaning applicants from across different industries are welcomed, as long as they fulfil the eligibility criteria.
Past cohorts have included a diverse group of companies, Navina said, including tech companies such as Cloud IOT Sdn Bhd and ICT Zone Sdn Bhd.
While the former is considering VC and PE funding options, the latter has successfully listed on the LEAP market and aims to transition to the ACE markets.
They have also supported non-tech businesses, such as Malaysian Yoghurt Company Sdn Bhd (also known by their brand name, Sunglo).
Elevate Programme has now announced two cohorts for this year, one starting in May, the other in September. Each cohort will take in 15 participating companies, with two participants per company.
Eligible companies who have applied will be further narrowed down based on their growth potential, talent, passion, and leadership.
“Ultimately, we want to see businesses leverage on their learnings and improved understanding of the capital market ecosystem, and improve their access to funding that will enable them to continue growing,” Navina said.
- Learn more about Elevate Programme here.
- Read other articles we’ve written about Malaysian startups here.
Featured Image Credit: Capital Markets Malaysia
