This article first appeared in The Edge Financial Daily on August 2, 2018

KUALA LUMPUR: Cradle Fund Sdn Bhd, an agency wholly funded by the finance ministry, has called on the government to help develop a start-up ecosystem attractive for private funds to invest in.

Speaking to reporters after meeting the Council of Eminent Persons yesterday, Cradle chief operations officer and acting chief executive officer Razif Abdul Aziz said the government should not keep pumping large sums into the start-up ecosystem because that method is outdated.

“I think the government only needs to catalyse the space and then attract interests from private sources such as private funds and corporates because they are the ones that will 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 be handed 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 said over the last five to six years, there had been many private funds coming into the region, seeking Malaysian start-ups. However, there is still ample space for private investors to enter the local start-up market.

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

He also said 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 the organisation will stay relevant due to its contribution to the start-up ecosystem, now more prevalent in Malaysia.

“Cradle Fund as an organisation has been 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 they are not pulling out from the [start-up] space. The government will continue supporting this space because they understand its significance.”