Majority of startup ideas not worth taxpayers’ money, says Cradle

Cradle Fund Sdn Bhd acting group CEO Razif Abdul Aziz says the biggest challenge faced by Malaysian start-ups today is the failure of imagination. (Facebook pic)

KUALA LUMPUR: There has been a robust interest in grant applications from start-ups in Malaysia but their ideas are often not worthy of tax-payers’ money, Cradle Fund Sdn Bhd acting group CEO Razif Abdul Aziz said.

He said the biggest challenge faced by Malaysian start-ups today is the failure of imagination.

“We receive anywhere between 600 to 700 applications a year for our grant products.

“While the number has so far held, suggesting that interest continues to be robust, the problem is that more than 80% of those applications are from digital-based start-ups, such as e-commerce, apps, software, content, services, etc,” he told reporters at the Cradle Startup Awards here today.

This, he said, showed a lack of diversity.

“There are also just too many ‘me too’ start-ups today, duplicates or variations of existing start-ups.

“It is becoming more and more difficult to pick truly innovative start-ups worthy of the taxpayers’ support.

“And the elephant in the room is where are the applications from the hard tech space, such as bio or green technology or life science?

“The few that we get suggest that the CIP300 is certainly viable despite the small fund allocation but why don’t we see more of them?” he asked.

The CIP300 is a pre-commercialisation programme which provides a conditional grant and value-added assistance amounting up to RM300,000 for entrepreneurs. It is intended to kick-start innovative technology-based start-ups to enhance and commercialise their products or services.

Malaysian tech entrepreneurs can choose to address the real issues in Malaysia such as traffic congestion, pollution, transport issues and healthcare.

If this continues, Razif warned that the Malaysian tech ecosystem risks losing its lustre to the market power of Indonesia and Vietnam, which are dominating interest in the region today.

Cradle Fund is Malaysia’s early stage start-up influencer, incorporated under the Ministry of Finance Malaysia in 2003 with a mandate to fund potential and high-calibre tech start-ups through its Cradle Investment Programme (CIP).

Throughout its 16-year history, Cradle has helped fund over 900 Malaysian tech start-ups and holds the highest commercialisation rate among government grants in the country. - FMT