[Ed: An earlier version of the caption mis-identified Nadia.]
Mission statements and goals set by public agencies are a dime a dozen and can be adjusted for convenience. But, launched in 2015, the Selangor Information Technology & Digital Economy Corporation (Sidec), a subsidiary of Invest Selangor Bhd, has been focused on its mission to lead the digital transformation of Selangor as ASEAN’s digital hub. [Sidec started life as the Selangor Information Technology & E-Commerce Council or Sitec before it was renamed in 2020.]
[Ed: Para updated for accuracy.]
Within the wide umbrella of the Digital Economy, Sidec has zoomed in to focus its efforts in order to achieve results and has picked eCommerce, startups and SME digitalisation as areas to move the needle.
One of the more interesting programs under its startups focus is the Pitch Malaysia USA Series where Sidec picks the most promising and ambitious companies that come through its various startup engagements and plans a week plus trip to the US to expose the startups to tech investors, the Malaysian diaspora and fellow tech founders in the US.
Last Thursday it held its Selangor Startup Day with sharing by startups which participated in the 3rd cohort of the Pitch Malaysia USA Series in May.
“The four-in-one program is designed to shine the spotlight on our promising startups, connecting them to global investors and providing them with opportunities to scale on a global stage,” said Teng Chang Khim, state exco councillor of Trade and Investment who was part of the trip to the US along with Selangor chief minister, Amirudin Shari.
Nine of the 11 startups who went to the US shared their experiences which included participating in the Select USA Investment Summit in Washington DC, and some roundtables in the Silicon Valley with venture capitalists, where they showcased their business ideas and forged connections with international investors. Among the VCs met in the Silicon Valley were, 500 Global and The Hive USA, both of which also have a presence in Malaysia, March Capital, and Piva Capital.
[Ed: Para updated with names of VCs.]
“We want to take Malaysian startups to compete on the global stage to go out of their comfort zone, because the challenge now is that we are facing increasing competition from even within the Southeast-Asia region,” Yong Kai Ping, CEO of SIDEC explained.
Out of the nine startups, Jason Low, CEO and founder of Virtualtech Frontier gained 3rd place in the SelectUSA Tech Regional Pitching session. It focuses on developing next-generation engagement technologies using VR and the metaverse.
One of his two key takeaways was how US and overseas contestants pitched.
“They start with a strong and ambitious ‘why’, and they truly believe that they can change the world,” he said.
One of the most memorable pitches that he heard was from a mushroom company, and they didn’t even grow their own mushrooms.
“It’s the way they positioned their startup like how they’re going to change the way meat eaters eat in the future and actually be a part to solve world hunger or meat supply-chain ecosystem, and I think they raised between US$7 million to US$10 million in seed funding,” Jason said.
Furthermore, what was eye-opening for Jason was when the startup talked about ‘the end’.
“They had a huge exit strategy, knowing what conglomerates that they want to join, and I feel like that is lacking when it comes to Malaysian startups,” he opined. “The beginning is as important as the way you articulate your exit strategy.”
Health-tech startup, QmedAsia had its co-founder and CEO Dr Kev Lim participate in the trip.
“We got to connect with a few US VCs every day and this was very valuable in expanding our VC network in the US while also getting feedback on our business model and execution plans,” he said.
“However, investors there prefer us to have a presence in the US because they only invest in the market they’re familiar with, and we were also told that it's challenging for foreign companies to venture into its market, particularly healthcare which is a highly regulated sector,” he added.
Nadia Ismadi, CEO and co-founder of POD admired the open sharing culture she encountered, especially in the Silicon Valley.
“It was very interesting to experience the open knowledge and ideas exchange, amongst even competing companies and startups in order to be evaluated or challenged. I think that kind of ecosystem is what we should foster here in Malaysia,” she said.
POD is a financial well-being platform for the underserved such as gig workers and the B40 in Malaysia and Southeast Asia.
Nadia also found that the investment appetite has changed. “Gone were the days, where you could just burn money to acquire as many users, but if you can’t translate those users into real ROI for your business, they’re not interested in listening to that ‘growth’ story anymore.”
“Not all US VCs understand nor have the appetite investing in the SEA market then those who already have current portfolio companies, understand the landscape, and have the appetite,” she added noting that this investor caution is also evident in Southeast Asia.
Their experience was good enough that both Kev and Nadia would recommend startups to be part of Sidec’s startup programs and participate in Pitch Malaysia USA should they get invited, even though participants have to pay around RM10,000 for the trip.
“I definitely would recommend this program, because Malaysian startups are not quite known and under the radar in the US market, while Taiwan's startups are better known because they go to the US and have been networking consistently for years,” Kev said.
“If they hit a certain scale in the sense that they’re not super young, and are looking to grow, I think it’s worth exploring and a good opportunity especially if they're ready to fundraise from a global venture capital,” Nadia agreed.
Yong also hinted at possible good news for startups. “The purpose of going to the US is to have visibility and also for future rounds, and I think with this trip we’ll see substantial investments within Selangor with PNSB.” PNSB is Permodalan Negeri Selangor Bhd, the state investment arm.
The nine startups with founders who participated in Pitch Malaysia USA series were:
1. Alps Global Holdings: Amanda Low
2. VirtualTech Frontier: Jason Low
3. Boxcube: Emil Rinaldi
4. iMotorbike: Gil Carmo
5. Entomal: Yanni Ching
6. Revenue Monster Group: Lim Kar Aik
7. Qmed Asia: Dr Kev Lim
8. Accendo Technologies: Sharma Lachu
9. Pod: Nadia Ismadi