After a tough 17-months, in which Cradle Fund Sdn Bhd (Cradle) lost, not only its outstanding CEO, Nazrin Hassan in a tragic incident in June 2018 but also was in a state of flux over its own future, with a new government relooking the structure and relevance of various development agencies, Cradle just wanted to end 2019 on a high and energetic note.
And what better way, it thought, than to organize its inaugural Cradle Startup Awards & Media Appreciation Night. The idea is to celebrate 16 years of empowering Malaysian startups and to recognise the contributions of Cradle supported startups and partners in cultivating a vibrant ecosystem and putting Malaysia on the global map. Even the media was recognized for its role in highlighting the various Cradle ecosystem initiatives and their impact.
And ironically the first media coverage of the event from the Malaysian national news agency Bernama, published while the function was still going on, Thursday night, caused a kerfuffle among Cradle staff and likely spiked the blood pressure of Razif Abdul Aziz, Cradle’s Acting Group CEO. In an era where online media regularly use sharp and spicy headlines to draw readers in, the headline screaming that Razif felt the majority of startup ideas were not worth being funded by taxpayers, proved too raw for an organization and its leader, coming out of an emotionally rough 17-month stretch.
Fearing negative public reaction, Razif took immediate action, not by calling for a press conference to clarify his remarks (that’s so pre-social media era), but rather by taking to social media to explain that while the headline was strictly speaking accurate, the way it was worded did not paint an accurate picture. Words matter. He viewed the lack of fundable ideas as a matter of concern over the lack of creativity and innovation displayed, explained Razif. Clearly he did not want the public to misinterpret the headline as him being harsh and cold.
But speaking of harsh, it is simply inexcusable that Razif, who has more than proven himself in the role, has not been formally confirmed as Cradle CEO despite having the support of the ecosystem and Yeo Bee Yin, Minister of Energy, Science, Technology, Environment and Climate Change (MESTECC). Apparently an enlightened soul in the Prime Minister’s Office feels that somewhere out there, a better candidate exists.
Back to the matter at hand, Razif highlights that more than 80% of applications for Cradle grants come from digital based startups such as ecommerce, e-services and software. This lack of new ideas which VCs term as “me-too” ideas, naturally makes it increasingly challenging to select truly innovative startups that deserve taxpayer’s support.
Solid job betting on ideas and entrepreneurs
For sure, DNA’s savvy readers would not have had an issue at all with Razif lamenting on the lack of fresh and bold idea and business models. This is nothing new. Speak to veterans of Malaysia’s investing community, from Chok Kwee Bee, Jamaludin Bujang, Amin Shafie, Dr V Sivapalan and they will tell you the same.
Anyway, it is supposed to be hard to get access to scarce public funds, with only the best and most innovative ideas and startups succeeding, and if the issue is that this is a small pool from which to choose, there is nothing anyone can do to remedy this, definitely not in the short or even medium term.
The main point to me is that Cradle has been doing a solid job thus far in taking bets on the ideas and entrepreneurs it extends grants to, being the public agency with the best commercialization record as well. And this against a backdrop of also taking the highest risks by mainly supporting startups from the idea stage and on to the pre-commercialization stage.
Look no more than Cradle being the first organization, in 2012, to fund Anthony Tan and his then fledgling Grab Technologies (called MyTeksi Sdn Bhd then). Nobody else was willing to support Grab.
Yet, more important than giving grants and making investments over the past 16 years is that Cradle has evolved over the years, from just offering money to realizing that entrepreneurs needed management and mentoring support as well, to ensure they are able to smartly invest the funding received. This has become a key facet of the work Cradle does today.
“We want to continue doing our very best to empower Malaysian startups by funding, supporting and guiding them. We do what we can to help companies grow and build pathways to markets, talent and partnerships”, said Razif.
Today, this “doing our very best” by Cradle to help startups has resulted in the creation of a vibrant startup ecosystem, with a track record that few development agencies can match with over 900 early stage startups getting help through various investment programmes.
Startup ecosystem to see 9x growth in GDP contribution by 2030
Dr Mohd Nor Azman, Deputy Secretary General (Science Technology & Innovation) of MESTECC who attended the event reiterated Cradle’s support to the startup ecosystem. “Cradle will continue to focus on providing opportunities for early stage technology based startups to achieve their dreams and keep the nation competitive in an increasingly globalised world,” he said while acknowledging the tireless efforts of startups, Cradle partners and media.
In quantifying the output of those efforts, an impact study of the Cradle Investment Programme was commissioned in 2018, where the Malaysian startup ecosystem was credited with contributing US$814 million (RM3.4 billion) to the nation’s GDP from 2008 to 2016 while creating 80,600 new full time jobs and attracting US$311 million (RM1.3 billion) in private and foreign funds.
Even more significant is the projected 900% growth to an incredible RM30.8 billion of the nation’s GDP by 2030 contributed by the startup ecosystem.
But to achieve this, a wider pool of entrepreneurs need to emerge, which is why Razif issued a clarion call on Fri. “We are encouraging more grant applications from the hard tech space such as the life sciences and green technologies, and also entrepreneurs with the daring to address real issues faced by Malaysians today such as traffic congestion, pollution, affordable housing, food security, transportation and healthcare”.
Cradle will also put money and create a specific ecosystem around the hard tech space
Bolstered by an allocation of US$4.8 million (RM20 million) for Budget 2020, Cradle aims to create a new range of grant offerings with higher fund limits designed to attract a wider range of startups from digital tech to hard tech. In tandem with this, it will develop a supportive ecosystem for the hard tech space by facilitating the development of angel investors, VCs, accelerators, and corporates that are interested in investing and supporting hard tech innovations.
Clearly startups will have a significant role in the overall nation building process and that is also partly why Cradle came up with its awards.
The inaugural event featured seven startup awards and recognising the contributions of an exceptional partner organization. The award recipients were:
- Rocking Cradle Recipient Award – Storehub Sdn Bhd
- Global Startup Award – iPay88
- Life Changing Award – Mentari Alam EKO (M) Sdn Bhd (MAEKO)
- Promising Startup Award– Involve Asia Sdn Bhd
- Outstanding Founder Award – Christy Ng
- Cradle Startup Ambassador Award – JomParking Sdn Bhd
- Special Jury ‘Nazrin Hassan’ Award – WORQ
- Best Supporting Partner Award – Sunway iLabs
The award recipients were selected by judges from Cradle as well as representatives from its partners. One of the aims of the awards is to encourage more startups and aspiring founders to emulate and surpass the success of the award recipients. And Cradle will be there to support those who are able to demonstrate good product-market fit, build traction, demonstrate an ability to execute and build defensible competitive advantages.
At the same time as it focuses on supporting more hard tech ventures next year, Cradle will not only be focusing on urban communities. It intends to extend its outreach activities to undeserved areas, sectors and communities and strive for more inclusivity and diversity to find the very best tech startups.
Also published on Medium.