Dana Penjana first close raised RM850m, around half from foreign investors

Dana Penjana first close raised RM850m, around half from foreign investors
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KUALA LUMPUR (June 9): Dana Penjana Nasional (DPN) — operationalised by Penjana Kapital Sdn Bhd, successfully raised RM850 million for its first close at end-May, of which RM433 million was from foreign investors.

In a statement today, Penjana Kapital stated that DPN — a matching fund-of-funds programme under the Short-Term Economic Recovery Plan (PENJANA) — exceeded its target of RM228 million by RM622 million.

"The government of Malaysia will match RM600 million, on a 1:1 basis, of the funds raised by the venture capital (VC) fund managers from foreign and private domestic investors, with a target allocation of RM1.2 billion.

"The successful first close means that the programme is likely to meet the target of RM1.2 billion," Penjana Kapital said.

Penjana Kapital said that DPN aims to bridge the funding gap by incentivising private capital to facilitate the growth of start-ups and create an enabling environment for these start-ups to scale and internationalise.

"Beyond being a vehicle to attract foreign capital to Malaysia, it is also a crucial lifeline for our start-ups," it added.

Of the total raised, RM118 million has been approved for investment in nine start-ups, with three notable ones highlighted.

The first is a home-grown mobility start-up, which is expected to create approximately 1,000 jobs in Malaysia and have an unnamed global automotive giant as an investor.

"[This] is expected to position the company as a potential Malaysian unicorn," said Penjana Kapital.

Meanwhile, it has also approved investment in a fintech start-up with an "innovative business model" which will be relocating its headquarters to Malaysia from Singapore post-investment.

"This investment will create high quality employment and attract the right talent to Malaysia for knowledge transfer," it said.

The third start-up is a "pre-unicorn fintech company serving multinational companies across Asia that is committed to investing up to US$100 million in Malaysia over the next five years post-investment".

"The company's expansion in Malaysia is expected to bring high value knowledge transfer from its Silicon Valley-trained team and create job opportunities for Malaysians in the fintech industry," it said.

Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz said that DPN's objective is underscored by the need to ensure that the Malaysian start-up space can overcome their Covid-related funding challenges, and continue innovating to contribute to the nation's advancement in various sectors.

"The projects that have been selected are developing solutions premised on innovative, cutting-edge tech, all of which could help Malaysia make that quantum leap towards its MyDigital vision much quicker than expected," the minister added.

Penjana Kapital noted that considering the total committed VC fund under management in Malaysia as at end-2020 was around RM4.4 billion, the RM1.2 billion to be invested from the DPN programme alone is "sizeable".

It expects this "sizeable" injection of funding to catalyse the local VC ecosystem and positively impact the local start-up space.

Lam Jian Wyn