Malaysia Venture Capital Management Bhd (MAVCAP) has hit a first close of US$50 million for two of its funds – Meranti Fund and Global Islamic Economy Fund – that are slated to launch this year. The combined size of the two vehicles will be at about US$450 million.
The Meranti Fund is named after the tallest known tree in the tropical rainforest and follows through with the ASEAN Growth Fund III previously raised with Gobi Partners. Like the former, Meranti Fund will continue to focus on later stage funding for technology-related startups in Malaysia and Southeast Asia.
“The target size is US$200 million. We are very confident that we will be able to raise that US$200 million,” said the CEO of MAVCAP, Jamaludin Bujang.
On the other hand, MAVCAP is also looking to see the first close for its second vehicle, a US$250 million Global Islamic Economy Fund. For this vehicle, the company is likely to partner with Silicon-based Elixir Capital to invest in Shariah compliant and Halal sectors. But things are still not set in stone.
“We are also considering options of doing it alone by ourselves,” said Bujang. “We are more flexible when it comes to the Islamic fund. I am targeting to launch the fund, hopefully by the third quarter of the year or under the worst circumstances by the end of this year.”
MAVCAP is one of the oldest VCs in Malaysia which develops the venture capital industry in the country using allocations from the government. However, the venture capital firm has started raising its own funds in recent years, in a move to reduce the use of government’s allocations.
“We realize that eventually, the government will stop funding so we have to go out and raise our own funds. Actually, it is timely as well because after being around for over 10 years, we cannot rely on the government for money anymore,” Bujang explains.
The venture capital firm now works on a model which involves forging partnerships with established VCs. Earlier it had jointly raised an ASEAN Growth Fund III with Gobi Partners and ECM Straits Fund I with Elixir. It is also a Limited Partner (LP) in funds like Axiata Digital Innovation Fund and 500 Durians, an ASEAN-focused fund from 500 Startups.
In another development, MAVCAP is also working on a clean-tech fund that is looking to invest in companies that will reduce environmental stress or negative effects on the climate. The clean-tech fund could have a targeted corpus of anywhere between US$50-US$100 million and it could be even higher.
“We are trying to talk to potential Limited Partners (LPs) from China on the clean-tech fund. So far the response has been good. We will manage that fund,” said Bujang.
By Vivian Foo, VCNewsNetwork