KUALA LUMPUR (Aug 1): Cradle Fund Sdn Bhd, an agency wholly funded by the Ministry of Finance, has called on the government to help develop a startup ecosystem that is attractive for private funds to invest in.

Speaking to reporters after meeting the Council of Eminent Persons today, Cradle chief operations officer and acting chief executive officer Razif Abdul Aziz said the government should no longer keep pumping in large funds into the startup ecosystem because that method is outdated.

"I think the government only needs to catalyse the space and then attract interests from private sources like private funds and corporates because they are the ones that are going to directly benefit from participating in the space," he said.

"The government's role is only at the earlier stages as a catalyst. After that, it needs to hand over to the private sector. So the ecosystem needs to be attractive for the private sector to come in; that is where the focus of our efforts should be," Razif added.

Razif said that in fact over the last five to six years, there have already been a lot of private funds coming into the region, looking for Malaysian startups. However, he said there is still a lot of room for private investors to enter into the Malaysia startup market.

"It is almost like they are fishing in our area but they are based out in Singapore, for example."

Razif revealed that over the last few years, the government's allocation for Cradle has been steadily decreasing, and he expects further reduction in Budget 2019. However, he is confident that the organisation will stay relevant due to its contribution to the startup ecosystem that is getting more prevalent in Malaysia.

"Cradle Fund as an organisation has prepared for the challenges of reduced allocations from the government. So in that sense we are ready. If it means less funding, we will still try and see whether we can deliver the same amount of output. I think it can still be done," he said.

"The council also made it very clear that they are not pulling out from the space. The government will continue to support this space because they understand its significance," Razif added.