KUALA LUMPUR, April 24 — The two-day KL20 Summit 2024 spearheaded by the Economy Ministry wrapped up yesterday, marking Putrajaya’s newest step to ascertain the nation within the high 20 international startup hubs by 2030.
During the summit, Prime Minister Datuk Seri Anwar Ibrahim launched the KL20 Action Paper, described as a roadmap outlining tangible reforms to convey collectively founders, enterprise capitalists (VCs), expertise, incubators and accelerators.
Several initiatives have been additionally introduced set to draw startups, founders and VCs to arrange store in Malaysia in a bid to incubate high-quality native startups.
The summit noticed three high-tech firms and 12 VCs saying their presence in Kuala Lumpur, along with three sovereign and semiconductor funds pledging RM3 billion for the Asean Investment Initiative.
eNews Malaysia takes a take a look at the three largest themes of the inaugural summit:
1. Putrajaya goes large on semiconductors and IC
Earlier this month, the World Economic Forum highlighted Malaysia as an rising semiconductor and built-in circuit (IC) powerhouse — particularly in Penang which attracted US$12.8 billion (RM61 billion) in international direct funding final yr.
The investments by multinationals into Malaysia reportedly will reinforce Malaysia’s entrenched place within the late levels of the semiconductor provide chain, notably chip meeting, testing and packaging, areas wherein it holds a 13 per cent share of the worldwide market.
This ambition has been backed by Prime Minister Datuk Seri Anwar who final week introduced that the Ministry of Investment, Trade and Industry will draw up a complete Semiconductor Strategic Plan to incorporate a extra engaging incentive package deal for strategic investments in high-tech semiconductors, notably to encourage extra front-end actions right here.
On Monday, Anwar introduced a serious enterprise to strengthen Malaysia’s place: Selangor Information Technology and Digital Economy Corporation’s (Sidec) Malaysia Semiconductor Accelerator and Integrated Circuit (IC) Design Park — touted to be the most important in Southeast Asia.
Sidec chief govt officer Yong Kai Ping stated the Puchong-based IC Design Park is predicted to herald financial returns between RM500 million to RM1 billion and can start operations in July this yr.
The park has roped in 4 companions together with British semiconductor large Arm Holdings, the Shenzhen Semiconductor Industry Association, Bayan Lepas-based IC designer SkyeChip Sdn Bhd, and Malaysia AI Storage (MaiStorage) — the latter being a brand new enterprise introduced by Datuk KS Pua of Taiwan-based Phison Electronics Corporation, broadly considered the “father of USB drives”.
Malaysia specialist semi-conductor fund BlueChip Venture Capital was additionally among the many three funds chipping within the Asean Investment Initiative.
Prime minister, Datuk Seri Anwar Ibrahim officiating the KL Summit 20 at Kuala Lumpur Convention Centre on 22 April 2024. Picture by Shafwan Zaidon
2. With golden passes, Malaysia courts international darlings and unicorns
In his keynote handle, Economy Minister Rafizi Ramli introduced a slew of incentives that may be relevant instantly as Malaysia pivots in direction of attracting international and regional unicorns — non-public startups which might be valued at over US$1 billion (RM4.8 billion) — quite than simply attempting to breed one domestically.
“The KL20 Action Plan outlines new initiatives that may speed up the crucial areas of a startup ecosystem: Capital, expertise, and high quality of startups,” he stated.
“The ambition is for Malaysia to be the selection vacation spot for early-stage and development capital; to be the centre for world-class entrepreneurs and expert expertise; and to be the house for world-leading startups seeking to begin, develop, and scale.”
This included the Unicorn Golden Pass, which incorporates exempted charges for employment passes for senior administration, subsidised rental, concessionary tax charges on company income, relocation providers, and a startup concierge that handles the backroom registration in the beginning.
To entice high-skilled expertise, the Innovation Pass affords a multi-tier employment cross programme, whereas the VC Golden Pass affords restricted companions funding entry alternatives, subsidised workplace areas, expedited licence registrations, and exempted charges for employment passes.
Putrajaya additionally introduced the KL20 GPU Scheme, a rebate scheme for using cloud providers and general-purpose computing on graphics processing models (GPUs), and selling the Innovation Belt the place startups, abilities, traders, corporates, and teachers can congregate in areas round KL Sentral and the Bukit Jalil’s Technology Park Malaysia.
In addition, KL20 additionally highlighted the Startup City Connect linking KL and Hangzhou, China, akin to a particular financial zone that promised seamless market entry to develop and scale startups in each cities.
Economy Minister Rafizi Ramli (second left) and Science, Technology and Innovation Minister Chang Lih Kang (second proper) through the launch of Majlis PraPeluncuran Acara Perdana KL20 at Parlimen Malaysia March 27, 2024. – Picture by Hari Anggara.
3. … But how lengthy wouldn’t it take for native startups to reap advantages?
Putrajaya’s change in technique to deal with international and regional startups appears to be pushed by the failure of Penjana Kapital Sdn Bhd and Malaysia Digital Economy Corp (MDEC) to groom 5 native unicorns since saying the goal in 2022. Online used automotive buying and selling platform Carsome stays the nation’s just one.
In his speech for the smooth launch of KL20, Rafizi identified that attracting high-quality startups and concurrently VCs and sovereign funds to spend money on the scene, could be a catalyst to develop the native scene as properly.
“By attracting these disruptors into our ecosystem, we need to drive Malaysia up the worth chain and exhibit our capability to compete with the perfect. It’s a easy message to the remainder of the world: Malaysia is open for enterprise in know-how,” Rafizi stated final month.
However, there may be additionally a way that the impetus behind that is how Malaysia has lagged behind neighbouring Singapore and is vulnerable to being eclipsed by Indonesia, Thailand, and even Vietnam sooner or later.
“The reality is that we have skilled missed alternatives in know-how investments, making it crucial for us to re-strategise and supply the very best ecosystem to achieve aggressive benefit in attracting high-value investments,” stated Anwar in his launching speech.
There has additionally been grumbling from native founders who attended KL20, with a few of these could possibly be discovered within the remark part of Rafizi’s put up on the summit in his LinkedIn profile.
Engineer-turned-entrepreneur Vishnu Kanth, who based family care supplier Vidola, raised questions on whether or not the funds and VCs introduced throughout KL20 would profit native startups.
“Literally I can’t see any advantages to the native startups at KL20. Sorry. the panels have been speaking about billions and billions of investments
“I got here with full pleasure to get an opportunity to pitch or share our concepts and merchandise however sadly the KL20 is for international funders and founders,” he wrote, prompting assist from different startup hopefuls.
Aizat Rahim, the founding father of business-to-business market Borong (previously referred to as Dropee), advised eNews Malaysia that extra incentives may be supplied to VCs quite than international unicorns.
“Malaysia has numerous nice abilities or entrepreneurs,” he stated, explaining that unicorns akin to Carsome and Grab — which shifted operations from Kuala Lumpur to Singapore — nonetheless depend on Malaysia for his or her income.
“But we Malaysians entrepreneurs are missing the assist from an funding perspective in comparison with our neighbouring nations. By bringing in additional VCs into the scene, typically, it will create extra native startups or entrepreneurs based from, or based mostly out of Malaysia — which can create a greater outlook normally.”
