Unicorns – Page 2 – Sure A Not

MRANTI inks MOU with Zhongguancun Science Park in China

On: April 25, 2024

The purpose of this project is to promote technological advancement and creativity in Malaysia.
Events commit to five strategic activities designed to promote reciprocal exchange.

Clearly Malaysian innovation agency, MRANTI’s visit last Dec to China’s leading science, technology and innovation hub, Zhongguancun Science Park ( Z- Park ), left an indelible impression on Dr Rais Hussin, CEO of MRANTI as he led another delegation to Beijing, China, where Z- Park is located to sign an MOU today with the Beijing Zhongguancun Science City Innovation Development Co Ltd witnessed by Chang Lih Kang, Minister of Science, Technology and Innovation ( MOSTI).

The two organizations have agreed to five strategic initiatives in accordance with the MoU’s conditions that aim to encourage significant technological and technology advancements. The five engagement areas are:

Education and seminars: Enhancing innovative capabilities, constructing strong technology ecosystems, incubating tech businesses, and transforming scientiﬁc research into business success.
Common benchmarking and a knowledge visit system: To promote immediate interactions and cooperative endeavors between businesses from both nations and to promote business collaboration and market expansion through planned visits.
Creative research: By combining the strengths of both entities, the program aims to address global challenges and obtain business- redeﬁning breakthroughs.
Soft-landing services for industry entry: Both organizations may offer soft-landing services that will enable businesses to understand new opportunities with greater ease and confidence.

” This engagement underscores the deepening collaboration between Malaysia and China, especially in the critical ﬁelds of technology, engineering, and innovation”, said Chang.

The Minister further underscored the broad approach of the agreement, adding,” We are eager to expand our cooperation across different sectors, including connectedness, the online business, the natural economy, present agriculture, and biomedicine. This reflects our complementary goals and our ability to make significant headway up.

Rais argued that cooperation is necessary to provide access to capital, business, skill, and innovation for both Malaysia and China.

” For Malaysia, the ability to access the vast Chinese business, access to funding/capital through the 80 rainbows in Zhongguancun Science Park, and not to mention the highly developed skills and creativity that can have a significant impact on the country and culture. Exciting times ahead indeed”, Rais added.

Zhongguancun Science Park is home to nearly 22, 000 high- tech companies, with an average of 90 new businesses being created each day. Global companies such as Lenovo, Baidu, Xiaomi and Beigene started up from there, as did over 80 Unicorn companies such as Toutiao, Mggvii and Cambricon. Over 200 branches and R&amp, D centres of the world’s Top 500 companies have oﬃces there as well.

Commentary: What the end of GrabPay Card could mean for Grab’s super-app ambitions

By: Marcus Ching

On: April 10, 2024

In: South-East Asia

A MATTER OF PUBLIC Attention?

But why would Grab’s competitiveness become a matter of public attention, not just the immediate issues of its shareholders? Yet if Grab was one of the pioneer rainbows out of Singapore and went public on Nasdaq in 2021, it extends beyond the realm of corporate success stories.

Given that Grab has become a key component of daily living in Southeast Asia, this change does not just involve healthier balance sheets. Its economic health immediately impacts a great ecosystem of motorists, merchants, consumers and employees. Using Grab’s marketing system, GrabAds, which processes over 10 million transactions normal across Southeast Asia, indicating a huge interest from retailers.

Success allows it to continue to invest in regional markets, create innovative solutions to regional problems, and support the digital equipment of the communities it serves. creating strong business concepts that would sustain regular jobs and companies in the face of economic uncertainty.

In some markets, Grab’s economic services have the potential to improve economic inclusion, offering available, user- friendly solutions to those who might often remain on the margins of the banking system.

However, this journey to success may be navigated with treatment. The advancement of fiscal sustainability should not be taken at the cost of the wider social and economic contributions that have helped Singapore become a tech head in Southeast Asia.

The current corporate decisions made by Grab show the inherent dangers and realities of financial innovation. They should not be taken while isolated examples, but rather as a reflection of the developing modern payments industry, which has regressed and frequently unchecked its expansion strategies.

As the online landscape continues to evolve, the real measure of Grab’s super- game ambitions will be its capacity to balance complex, usually competing, demands- profit and innovation with the responsibility of being a key player in the region’s digital economy.

Dr. Jonathan Chang is the CEO of Fintopia Indonesia, a banking dragon that specializes in online lending. He is also a teacher, open policy advisor and an honor- winning researcher.

China’s big bet on ‘new quality productive forces’ – Asia Times

By: Bolen C

On: April 4, 2024

In: Asia

Do n’t tell Donald Trump, but his pledge to impose 60 % tariffs on Chinese goods may help Xi Jinping’s efforts to boost the biggest economy in Asia in ways that Washington did n’t expect.

Granted, President Xi has been previewing his buzz- expression of “new excellent successful forces” since at least next September. Though mysterious and a tad confusing, Xi’s interior circle has been selling it as the solution to China’s financial future.

Little did Team Xi know that former US president Donald Trump would be assisting the Communist Party in selling the plan. In the decades since September and the National&nbsp, Women’s Congress in early March, Trump unveiled his plan to make deal war great again.

On top of crushing new import fees, Trump says he plans to withdraw China’s “most popular state” position if elected in November. These steps may produce Trump’s 2017- 2021 tenure in the White House seem calm by assessment.

Trump’s Republican Party is doing so by repeatedly reminding Xi’s celebration of the absurdity of acting consistently to encourage local demand-driven growth.

To maintain development of nearly 5 % year over year, China must encourage its customers to spend more and keep less. That entails boosting incomes and creating stronger social safety nets to stimulate spending.

Additionally, it means developing more reliable capital markets so that the typical Chinese may participate in both stocks and bonds rather than just real estate.

Yet Beijing’s intense concentrate on goosing use time and time again is destructive, some economists say. It makes China vulnerable to boom-and-bust cycles that necessitate immediate interest at the expense of reinvigorating the economy. Additionally, China’s heavy emphasis on exports makes the economy vulnerable to Trump-like trade war tics.

There’s no better option to accelerating and broadening China’s development as a large- technology powerhouse, advancement experts agree. And as 2024 draws near, there are signs that this is the hinge that Xi and Premier Li Qiang are trying to achieve.

In a report pictures, Li Qiang and Xi Jinping. Image: Twitter / Screengrab

Xi’s party stated at the NPC last month that” It’s crucial to support efforts to modernize the business system and promote the creation of new successful forces.”

According to Xinhua, the top priorities are “promoting green successful forces” throughout the country and” spurring revival of north China.” And making China a strong pioneer in semiconductors, electronic- car supply chains, clean energy, advanced infrastructure, aviation and unnatural intelligence.

Justin Yifu Lin, a former World Bank chief economist, argues that China “has enough space for ascent of technological development, business upgrade and performance level”. He cites the nation’s high savings rate, abundant investment resources and government commitment to economic development.

China, Lin says, has certain advantages that often get lost in worries about current economic challenges. As a major developing economy, Lin notes, China is” still in a process of industrial upgrade and still faces a big gap with developed countries, but this creates a latecomer’s advantage”.

During this catch- up stage, other economies including Japan, South Korea and Germany achieved a growth rate of 8 % or above. According to Lin, China has the potential to accomplish that if they can.

China “has yet another advantage in the new economy, which is characterized by artificial intelligence and the digital economy.” China is placed in the same starting position as those developed nations, but it has shown a significant advantage in developing new technologies in the process, Lin claims.

Lin also highlights China’s “abundant human capital” and its massive scale. That is, “any technological advancement or new product development can quickly enter the domestic market and benefit from economies of scale. China can outstrip developed nations in terms of scale thanks to its enormous domestic market size.

Also, China has, in Lin’s view,” the best industrial supporting capability of almost any economy globally”.

Beijing made a number of state-owned companies and conglomerates known on March 29 that it hopes will encourage China’s next big foray into future-oriented sectors and lessen US-led efforts to stop China’s rise. They include AI, neuroscience, quantum computing, nuclear fusion and other tech- driven industries.

This “pioneer” scheme is being overseen by the State- owned Assets Supervision and Administration Commission. The goal is to deputize several conglomerates in order to start a boom in startups that will foster a vibrant ecosystem for a new wave of tech “unicorns.”

According to Lin Xipeng, an analyst with China Merchants Securities, the commission “has given a clear mandate that developing emerging and future industries is a crucial task.” ” While cultivating start- ups and units within their ecosystems, SOEs will also tap external investment and merger opportunities”.

The key is to end the West’s” chokehold” on China’s tech development, says Hu Yongjun, an analyst at the State Information Center under the National Development and Reform Commission.

This, of course, raises any number of risks as the US tightens the screws. Current President Joe Biden has sharply restricted China’s access to semiconductors and other important technology while Trump imposed massive tariffs. In addition, Beijing has united allies Japan and South Korea in a close relationship with China. Additionally, he has pledged to make hundreds of billions of dollars investment to rebuild home tech.

For China, it is a clear inefficiency that has hampered Beijing’s up-tech plans by making new high-tech products with less-than-modern machinery. Even so, the quicker China puts innovation and entrepreneurship in the economy’s driver’s seat the better.

China’s semiconductor market faces US sanctions. Image: Asia Times Files / iStock

A segue of this size, according to Xi’s inner circle, will increase Chinese competitiveness to levels comparable to those of its US and European counterparts. Beijing also believes it will replace a high-wage workforce in order to raise living standards and consumption. Then, over time, China’s growth will be self- reinforcing without the need for bursts of traditional fiscal and monetary stimulus.

Not everyone is convinced it’ll work, though. According to Arthur Kroeber, an analyst at Gavekal Dragonomics,” the theory is that all of these investments in high-tech industries will ultimately lead to very successful companies that will be able to employ people at high wages and that will ultimately lead to a lot of employment growth and consumption growth in the future.”

Kroeber warns that” the issue with that is, number one, that no matter how successful they are, will be able to completely replace the lack of demand that you are having from a property sector that is probably shrinking by somewhere in the neighborhood of 30 to 40 %.”

The” second thing,” according to Kroeber, is that even if these investments in high tech pay off, and I honestly believe a lot of them will, it does n’t necessarily mean that productivity will increase across the entire economy.

Kroeber warns that these high-tech companies may end up contributing only a small percentage to the economy’s overall employment. Most employment in the last decade has come from service sectors, largely from consumer- facing industries, and there’s no particular reason for that to change.

” So”, Kroeber argues,” the idea that you are going to create an economy- wide productivity boom that will raise overall wages and consuming power from these high- tech investments, I think is a little bit fantastical, frankly. So when I add all of this up, I believe that looking ahead to the upcoming years, we can anticipate that China will continue to struggle to maintain growth.

Yet, all the more reason for China to forge a new, different path forward. One reason is to address its getting more complex demographic problems. China must act urgently to increase productivity as its 1.4 billion-person population gets older and local government debt levels swell.

According to David Mann, the Mastercard Economics Institute’s chief economist for Asia-Pacific, the mainland had” a lot of growth coming purely from just more people showing up each year” before it was able to ignore economic inefficiencies.

In that context, private sector expansion and disruption have never been more crucial. The key question, as Mann sees it, is how rapidly and reliably Xi’s team is “able to bring in those innovations and introduce them in a way that does keep growth a bit stronger, without needing to resort to, for example, residential real estate investment, which is not as productive”.

International Monetary Fund head Kristalina Georgieva made the adage that China should increase domestic demand-driven growth when she spoke in Beijing last month. She also made a compelling argument for greater productivity and innovation.

” Domestic consumption depends on income growth, which in turn relies on the productivity of capital and labor”, Georgieva explains. The allocation of capital will be improved by changes such as improving the business environment and ensuring a level playing field between private and state-owned enterprises. Higher labor productivity and higher incomes will be achieved when human capital is invested in: education, life-long training, and reskilling.

Georgieva emphasized that these changes are “particularly crucial as China attempts to capitalize on the opportunities of the AI “big bang.” The state of a country’s readiness for the artificial intelligence world is already a problem for today.

But, Georgieva said,” the transformation ahead is not easy. The remarkable development success of China has benefited hundreds of millions of people. The younger generations are going through what many countries have gone through before as economies mature and growth&nbsp, moderates, and have lived their entire lives in an environment with exceptionally high growth rates.

In recent years, Xi’s efforts to champion high- tech industries, particularly cutting- edge manufacturing and service sectors, flowed from his” Made in China 2025″ project. That plan is to lead the global charge on semiconductors, biotechnology, aerospace, renewable energy, self- driving vehicles, artificial intelligence, green infrastructure, logistics and other areas.

This 2025 vision matched efforts to establish a form of” Silicon Valley East” in southern China. Xi’s so- called Greater Bay Area enterprise has sought to group Hong Kong and Macau with Shenzhen and eight other municipalities all angling to become economic powers of their own, namely Guangzhou, Zhuhai, Foshan, Huizhou, Dongguan, Zhongshan, Jiangmen and Zhaoqing.

The 55- kilometer Hong Kong- Zhuhai- Macau Bridge cost more than US$ 15 billion to build. Photo: Xinhua

Municipal leaders across the country are catching up on the innovation-first zeitgeist in a quick move.

In January, for example, the eastern city of Hefei christened the first tranche of a series of big projects in areas including new energy vehicles ( NEVs ), new- generation information technology and photovoltaics. The wave of investment totals 36.7 billion yuan ( US$ 5.1 billion ).

Hefei is on the vanguard of locales for China’s scheme to build 10 national research labs, each charged with a different area of specialization. In the case of Hefei, it’s a quantum computing lab, in Shanghai, its a lab focused on AI pursuits.

ln the eastern Xiamen city, part of Fujian Province, more than 53 billion yuan ($ 7.3 billion ) worth of productivity- enhancing projects in new energy, new materials and biomedicine have been greenlit.

In central Henan Province, contracts for cutting-edge manufacturing facilities and a number of future-oriented emerging industries have been signed for almost 600 billion yuan ($ 83 billion ).

Such efforts are important because they provide a route for local governments looking to leave the land sales industry. Municipal leaders from developing local economies were disoriented by the almost linear focus on selling and leveraging land to generate tax revenue over the years.

None of this will, to be sure, be simple in the long run. Xi’s efforts to deleverage the economy are focused on the provinces of China. Banks are being advised by regulators to repress their use of offshore bond-issuance laws by local government financing vehicles ( LGFVs ).

The$ 9 trillion&nbsp, mountain of LGFVs ‘ debt&nbsp, is a major challenge to Xi’s efforts to pivot toward more productive and sustainable tech- driven growth.

In the interim, Jeremy Zook, an analyst at Fitch Ratings, says that “economically weaker regions may face further deterioration in fiscal revenue and tighten expenditures”. He continues,” It’s quite a balancing act” at the moment when Xi wants to encourage economic growth and reduce rampant borrowing across the country.

Indeed, massive state-led economic transitions of the kind China is attempting to pull off take time and a lot of risk. The key, though, is that Xi and Li ensure that “new quality productive forces” is more than just an empty slogan.

Shifting engines in such fundamental ways&nbsp, without crashing the economy will require, at least for a time, increased foreign direct investment ( FDI), which just fell to a 23- year low of$ 42.7 billion of inflows in 2023.

On March 27, 2024, Chinese leader Xi Jinping meets with US CEOs and academics at the Great Hall of the People in Beijing. &nbsp, Photo: Xinhua /
Huang Jingwen

Another issue that many foreign investors are concerned about is that Xi’s blueprint for a more innovative economy is full of soaring rhetoric and promises but is lacking in specific reform measures to increase investor confidence.

True, the$ 7 trillion stock market rout from a 2021 peak to January has seemingly stabilized. It’s worth noting, too, that Xi recently hosted a who’s- who of global CEOs from Apple’s Tim Cook to Blackstone’s Stephen Schwarzman to Tesla’s Elon Musk to Boeing’s Stan Deal to Pfizer’s Albert Bourla to reassure the international business establishment.

However, Beijing’s actions will speak louder than words. Trump hardly deserves praise for all of this. However, the trade war presents a chance for Trump to win the presidency, which supports the claim that China needs to change its economic stances quickly.

Follow William Pesek on X at @WilliamPesek

Soonicorn Collective – 18 pioneer members selected

By: Mary Blight

On: March 18, 2024

In: Technology

Committed to biome, financial, and nation- creating contributions
Provides management abilities development, creates relationships among founders&nbsp,

Members of Soonicorn Collective

The Soonicorn Collective, a membership-based program designed to groom the next unicorns of Malaysia, develop a solid business ecology in Malaysia and support policy proposals and wedding with government leaders, has been selected by Proficeo Consultants in partnership with Penjana Kapital.

Coined from the word” quickly- to- get unicorns”, Soonicorns are startups with the development potential to get unicorns. All of the chosen members are either CEOs or C-level owners. To participate, startups need to have raised at least US$ 424, 000 ( RM2 million ) in funding or have generated US$ 1.6 million ( RM8 million ) in revenue over the last 12 months.

Being the CEO of a business is a challenging and sometimes lonely journey, said Dr. Sivapalan Vivekarajah, co-founder of Proficeo and chair of the Soonicorn Collective. The most effective founders have had strong support systems and camaraderie with another founders, especially when it comes to building the company that is growing. ” &nbsp,

He continued, Not only does the Soonicorn Collective program help to advance leadership skills, but it also provides a unique setting for the selected owners to network and develop relationships with one another and with other successful unicorn builders. &nbsp,

This group of like-minded peers and a shared understanding of building successful businesses will be a great help for them in overcoming the difficulties of being CEO and the possibilities of creating rainbows, said Dr. Sivapalan.

The founder and CEO of Homa2U, an inexpensive, responsible home improvement company, Pennie Lim says:” As a business leader, the trip can often feel single. I long for a peer-to-peer area where I can openly discuss my issues and frustrations with like-minded, upbeat business people. With the launch of Soonicorn Collective, it seems like the perfect upgraded system where I may unlearn and rediscover strategies, enabling me to create a more effective company without taking unnecessary detours. ” &nbsp,

Lim continued,” I look forward to the opportunity to interact with this group, gain insights and assistance, and use business life’s complexities more effectively and efficiently.”

The founders held regular discussions in the previous 12 months under the program structure of 100Soonicorns where they discussed the numerous issues they encountered as they developed their businesses from the beginning stages to Series A stage and beyond. Additionally, the program gave them a chance to speak with seasoned fairy members who had previously raised money and created unicorns, such as Chu Jenn Weng of Vitrox and Moses Lo, CEO of Xendit, Steve Melhuish of PropertyGuru, Ronen Mense of Appsflyer, and Steve Melhuish of PropertyGuru. The members gain a distinctive learning experience as they contribute to the growth of their own businesses as they learn from society, managing sales teams, and going local.

Additionally, they had the opportunity to speak with officials and experts who taught them leadership skills, as well as local and global enterprise entrepreneurs from companies like Vertex Ventures, Gobi Partners, Golden Gate Ventures, and Khazanah Dana Impak. The founders of Kenanga Investment Bank took the most recent factory, where they learned how to Offering their business as part of their voyage from business to rise to return. These conversations and meetings provide a unique learning opportunity for the owners and professionals.

The Soonicorn Collective is dedicated to promoting habitat, business, and nation-building in addition to serving as a forum for learning and engaging with the neighborhood.

There is a movement sparked by this collective, led by Ramachandran Muniandy, CEO of Asia Mobiliti, a mobility-as-a-Service ( Maasas ) and digital city solutions company, and co-chair of the Soonicorn Collective shared. All boats are lifted by a rising sea. ” &nbsp,

He added that the owners have the chance to influence the splitting of the sky over Malaysia’s ability for a unicorn-building and witness the transformation of many current and future companies into regional and global champions as entrepreneurs for such a time in this country.

Soonicorn Collective is available for software. Those who are interested you find more details and the application form below.

The Soonicorn Collective’s Pioneer Founders are:
1&nbsp, Ramachandran Muniandy, CEO &amp, Co- Chairman, Asia Mobility Technologies Sdn Bhd
2&nbsp, Nadira Yusof, CEO &amp, Founder, Kiddocare Sdn Bhd
3&nbsp, Sharma Lachu, CEO &amp, Founder, Accendo Technologies Sdn Bhd
4&nbsp, Giden Lim, CEO &amp, Co- Leader, BLOOMTHIS Flora Sdn Bhd
5&nbsp, Keong Chun Chieh, CEO, Ominent Sdn Bhd ( IGL Coatings )
6&nbsp, Sharala Devi Balakrishnan, CEO, Center of Applied Data Science ( CADS )
7&nbsp, Mohamed Tarek El- Fatatry, CEO &amp, Co- Founder, Blue Bee Technologies ( ERTH App )
8&nbsp, Nuraizah Shamsul Baharin, CEO &amp, Founder, Madcash Sdn Bhd
9&nbsp, Lee William, MD, Easybook ( M ) Sdn Bhd
10&nbsp, Parthiven Shanmugan, CEO, TixCarte Sdn Bhd
11&nbsp, Effon Khoo, CEO &amp, Founder, Kakitangan.com
12&nbsp, Hui Yik Seong, CEO &amp, Founder, Direct Lending Sdn Bhd
13&nbsp, Pennie Lim, CEO &amp, Co- Leader, Homa Sdn Bhd
14&nbsp, Jayson Poon, CEO &amp, Founder, Payex Ventures Sdn Bhd
15&nbsp, Derek Tan, CEO &amp, Co- Creator, Sonicboom Solutions Sdn Bhd
16&nbsp, Sandeep Grewal, CEO &amp, Co- Creator, Subhome Management Sdn Bhd
17&nbsp, Gavin Liew, CEO &amp, Co- Creator, The Makeover Guys Sdn Bhd
18&nbsp, Gokula Krishnan Subramaniam, CEO &amp, Co- Chairman, Vircle Sdn Bhd

Can Rais Hussin stamp his mark on Malaysia’s innovation ecosystem?

By: Mary Blight

On: March 17, 2024

In: Technology

received a sizable grant from the government to enhance MRANTI
To utilize 4IR to enhance world’s food production, agency up food protection

Rais Hussin (right) at the launch of the Autonomous Vehicle Testing facility at MRANTI in late 2023.

The one thing that Dr. Rais Hussin is not is boring, regardless of whether you like him or not, and his turbulent two years as the non-executive chairman of Malaysian Digital Economy Corporation ( MDEC ) made sure that the ecosystem had one opinion or the other.

And that largely comes from his sincerity and natural desire to tell items as they are. When questioned in late 2020 why he was acting like an executive chairman and outstepping his authority at MDEC, he replied,” I am not here to be a cake breath chairman.” He may have denied, veered off, or simply sugarcoated the position, but Rais is not. Therefore the polarizing ideas he has.

And even when an MDEC administrative gives him breaks, it comes with a bite. ” He can bring money to the table as proven by how he convinced CIMB Bank to allocate US$ 2.12 million ( RM10 million ) in 2021 for an agritech focused&nbsp, micro- financing programme”.

Such was the success of the program that in 2022 and 2023 the government allocated MDEC funding of RM10 million and US$ 4.25 million ( RM20 million ) to expand its agritech drive. The professional stated that the government had not provided MDEC financing for agritech prior to this. Rais put the program up so rapidly, which was due to her having only been discussed and discussed in the past without any real action.

]RM1 = US$ 0.212]

However, his meddling with the operation of MDEC was on the other area. ” He does not know how to operate a government agency and his interference was ridiculous”, said the executive, adding,” The reputation of the Discretionary Authority Limit is something we are also living”, referring to a vital principle Rais introduced, designed to minimize the financial level by which MDEC officials had make funding/grant choices. Ras argued that some MDEC officials had abused the previous system because it was flawed.

You Rais move a government agency?

But, amazingly, Rais now has been given the opportunity to show that he can move a government agency. And Rais recently held a presentation for the advertising to promote some updates and give a hint that” there are more exciting and beautiful things coming in the near future” after sitting silent for almost five months since his wonder appointment as CEO of MRANTI in October 2023.

Bullish words for a business executive who has pledged to” we will not spend on anything that has no effect on society and the nation.” And to underscore this promise, he and then-Prime Minister Muhyiddin Yassin had a conversation while on his first official public meeting as chairman of MDEC in late 2020, when he was present for a major launch the organization had at a low-cost public housing area.

A resident took Rais to a run-down PC room with 40 desktop units, and he claims to have been turned aside by the resident. Only 20 of them were operational, and 15 of them, even here, had flickering screens.

How wonderful if we could get 40 new PCs instead of this event, the elderly resident thought to herself. Rais, who has since used the unforgettable encounter to guide him in how to create and deliver real, meaningful, and impactful programs for the country and its citizens while reducing showy spending, said:” His words hit me hard.” That MDEC program cost RM800, 000.

One important take away from the briefing is that Rais immediately demonstrates his ability to attract funding, which is in part due to the close working relationships he has with senior members of Prime Minister Anwar Ibrahim’s Pakatan Harapan coalition.

In essence, Rais argued to the Ministry of Finance and Economy Ministry where the 28-year-old park stood in relation to its appeal as a hub for innovation in its current aging state as opposed to the goals the government had for it. He also argued that proper investments were required to bolster MRANTI’s reputation as a world-class innovation hub. So what happened? &nbsp,

The government has acknowledged that comprehensive upgrades are necessary and has given the park’s 686 acre infrastructure a significant amount of funding, Rais said, who declined to disclose the amount that will be invested over a three-year period.

Even though there was a lot of flux at MDEC, Rais has adopted a supportive mindset at MRANTI in terms of his leadership team. He has repeatedly said,” I have an amazing team,” noting that the only new senior hire has been a” transformationist” in the procurement field and that there may be two more senior positions to be filled.

He said,” Those who know me, realize that I take governance very seriously,” in a nod to his prior experiences at MDEC. And in a different agency, I had taken a very robust approach. But not here. We have a fantastic team that is adaptable to change.

Rais at the media briefing.

innovation to address nation and citizen pain points

Moving forward, Rais stated that the Board’s intention is to “accelerate demand driven R&amp, D using 4IR to address national challenges” rather than the name MRANTI ( Technology Innovation Park Malaysia ).

The use of 4IR is no coincidence as Rais has co- authored a book in 2019 ‘ 4IR – Reinventing A Nation”. He also mentioned that Mosti has appointed MRANTI as an organization that is “tasked with facilitating addressing food security using 4IR,” and that we are working very hard in this area because Malaysia’s food bill in 2023 was around RM72 billion, excluding dried and processed food.

No specific plans have been made by MRANTI in this regard, with Rais looking to Qatar for inspiration. The tiny country benefited greatly from relying on 4IR technologies to undergo a dramatic transformation, going from importing most of its food needs to becoming an exporter. To learn from the desert nation, two teams will be sent to Qatar.

Rais insists that the MRANTI approach does n’t just involve copying others. Innovation must address the pain points of the nation, “he said while highlighting that around 97 % of people want five things in their lives – affordable cost of living, affordable and quality healthcare/education/housing and dignified jobs.

As we continue to position Malaysia as a leader in technology production and the nucleus of innovation, these are the pain points we need to address.

Without a doubt, these are ambitious objectives for Rais and MRANTI, taking into account the reality that the agency cannot significantly slow the pace of innovation in the nation by itself, with its business model of collaborating startups, the private sector, and academia in their innovative endeavors while enticing regional and international corporations to set up their innovation centers at MRANTI, utilizing its 686 acre landbank to generate revenue.

On 5G, MRANTI provides a drone and an area for autonomous driving testing. However, despite the facilities being provided, use of the two test zones entirely depends on ecosystem players, including businesspeople, corporations, and academics, for their testing. MRANTI has no funding or grants to distribute, nor does it have any valuable IP or researchers to share with ecosystem partners.

According to Rais, there is a reality to be had if he is to predict “exciting and sexy” developments to come. He states that the goal is for 2024’s revenue to increase 29 % while maintaining positive EBITDA, compared to 2023’s revenue of RM126.2 million and RM17.5 million.

An artist impression of MRANTI from the previous CEO, Dzuleira Abu Bakar's time.

Chinese investments are being made

Some of the exciting developments to come stem from a Dec 2023 trip to China, visiting some leading companies there, including Geely, pitching MRANTI to them. Rais anticipates that two universities will open campus branches, one AI company to launch an innovation center, and the other to establish operations with another company opening an innovation center at MRANTI.

An AI capacity development program will be launched by a global tech company, reportedly Nvidia, for free to increase their job prospects with another 1, 000 spots for startups, which is a more immediate development that he is excited about, and it’s because it cost him nothing to put together.

This project also serves as an example of Rais ‘ ability to maneuver with discernibility and deftly navigate layers. The tech company had tried for years to offer the government the project to improve AI skills. They agreed to support the project on the spot and their chairperson, Prof. Dr. Rofina Yasmin Othman, at the meeting that Ras organized. Rass then instructed the executive to allow him to spend the night at his leisure, and that evening he and Zambry Abdul Kadir, the minister of higher education, met to discuss the initiative with him.

The launch will see both Zambry and Chang Lee Kang, the Minister of Science, Technology, and Innovation in attendance. Rais ‘ agency sits under Chang’s portfolio”. I am Mr. Zero Capex and “quipped Rais of the project that will be launched end of April.”

The greatest challenge

Despite a few early victories, Rais is unsure of how significant a challenge lies ahead for the nation in terms of innovation advancement. He now understands the enormous challenge that lies ahead thanks to his trip to China and particularly the innovation park Zhongguancun Science Park (Z-Park ) in Beijing.

While serving as one of the many innovation parks in the greater Beijing area, the park has hosted an astounding 108 unicorns, each with a number of leading local and international businesses as tenants. ” Every visit to the park left me feeling depressed back at the hotel,” Rais said,” so vividly recalled a time when Malaysia was ahead of China ( before it opened its borders and joined the WTO in 2001 ). But now we are 30 to 40 years behind them”.

Where are we failing to act morally? What can we do that they cannot do? In his head were these questions lingering. However, this was the one constant response Rais would receive from his Chinese hosts. Their success was attributed to the top-down approach the nation took to innovation. It is incorporated into all the verticals they want to become leaders in, Rais said.

It will be Rais ‘ greatest challenge, and it will result in many sleepless nights for him, to try to replicate this in the Malaysian context and the capabilities of its entrepreneurs, businesses, and researchers.

China blowing past Japan on autos may trigger change

By: Bolen C

On: January 16, 2024

In: Asia

If there’s any surprise over the fact that China dethroned Japan in 2023 to become the world’s top automaker it relates to how fast that happened.

Overall, auto exports jumped 58% last year from the prior one, topping 4.91 million units, says the China Association of Automobile Manufacturers. Along with deploying its increasing strength in electric vehicles, China Inc managed to tap Russia’s sanctions-hit market with unexpected aplomb. Detroit is not thrilled, of course.

But the truly tantalizing question is how all this goes over in Japan, where, 12 years on, officials are still struggling to get their heads around China’s surpassing Japan in gross domestic product terms. That GDP changing of the guard happened, depending on your preferred data set, sometime between 2010 and 2012.

Since then, Japanese governments in succession have convinced themselves that GDP isn’t the key metric: It’s per capita income, in which Japan leads what’s now Asia’s biggest economy by nearly three times. Yet the blow to Japan’s collective psyche from losing the GDP crown was a devastating one.

Arguably, shock over trailing China helped Shinzo Abe retake the premiership in late 2012. Abe’s economic revival scheme wasn’t pitched as a beat-China strategy – but that’s precisely what his strategy to loosen labor markets, cut red tape, rekindle innovation, catalyze a startup boom and revive Tokyo’s role as Asia’s indispensable financial hub amounted to.

Years of Tokyo complacency since then have been good to China, enabling Xi Jinping’s economy to fill the void created by deflation-racked Japan. The 12 years since Abe’s Liberal Democratic Party returned to power have been a lost period for major economic retooling.

Efforts to produce more tech “unicorns,” for example, went particularly awry. Today, Japan is trailing Indonesia in the race to generate $1 billion-plus valuation startups.

The same muddle can be seen in Japan’s almost linear obsession with hybrid vehicles as the EV market shifts into overdrive.

True, officials at Toyota Motor and Japanese peers are realizing their mistakes in having dismissed the EV future that’s fast coming into view. Toyota is playing catchup with new models. Japan’s top automaker is tripling EV output as it chases China’s BYD, which recently surpassed Elon Musk’s Tesla.

The question, of course, is whether it may already be too late as Tesla, Detroit, Germany and China beat Toyota to the market. “No one,” says Michael Dunne, CEO of auto industry advisory ZoZoGo, “can match BYD on price. Period. Boardrooms in America, Europe, Korea and Japan are in a state of shock.”

Toyota’s blunder is reminiscent of Japan Inc missteps of the past. It’s worth nothing that hybrid transport — including the Prius — was always a compromise, not a technological destination. But because Toyota pioneered it, the company refused to admit that something better had come along.

A similar lost opportunity played out in the 1980s during the Betamax versus VHS video competition. Sony argued that its Betamax technology was superior; the global market favored the more user-friendly VHS format. The years that it took Tokyo to accept defeat set Japan back.

Will China’s stunning success in an industry that Japan long dominated in the Asia region and beyond catalyze officials in Tokyo and the greater Nagoya region?

“For the first time, I came face to face with the competitiveness of Chinese components,” Toyota EV Chief Takero Kato said in September. “After seeing manufacturing processes not used in Japan,” Kato says he thought, “We’re in trouble!”

China Inc is, for example, making big inroads into once reliably Japanese markets such as Thailand. Already, EV models account for 10% of the Thai market. The so-called “Detroit of Asia” is now China’s number 2 destination for Chinese EVs. Ditto for plug-in hybrid vehicles.

Japanese Prime Minister Fumio Kishida met with Thai Prime Minister Srettha Thavisin on December 17, 2023, in Tokyo. Photo: Wikipedia

Perhaps sensing the risks, Japanese Prime Minister Fumio Kishida last month met with Thai Prime Minister Srettha Thavisin. In Tokyo, Kishida proposed a dialogue framework to ensure that Thailand’s auto industry will strengthen its competitive advantage in EVs and the range of next-generation automobiles. More importantly, that Thailand will remain in the Japan camp.

Also last month, Srettha, a businessman-turned-politician, announced that four Japanese automakers will invest 150 billion baht ($4.3 billion) in EVs in Thailand over the next five years. They include Toyota, Honda Motor, Isuzu Motors and Mitsubishi Motors.

At that time Srettha’s spokesman said, “The prime minister has stressed that Japanese carmakers can play an important role in promoting EV production in Thailand.”

In Japan, Kishida’s government is offering decade-long tax incentives to boost production in EVs and high-quality chips to lure more foreign direct investment. The tax breaks will be part of Tokyo’s fiscal 2024 tax reform framework. They will include 400,000 yen ($2,755) for battery-powered EVs and hydrogen fuel-cell cars.

Tesla, unlike many global peers, won’t be roadkill as China grabs more market share, ZoZoGo’s Dunne argues. Musk’s wares benefit from a first-mover advantage and also the goodwill that comes from Tesla’s choice of the Shanghai area as the site of its first production facility outside the US.

“What does this mean for global automakers not named Tesla?” Dunne asks. “BYD will continue to win large chunks of market share from legacy automakers worldwide.”

What’s more, Dunne says, “China’s market, the world’s largest, no longer needs or wants foreign makers. Jeep, Suzuki and Mitsubishi are already gone. VW, Ford, Hyundai, Nissan, and others will depart within five years. GM, once the poster child for successful US business in China, will likely be gone, too. GM sales in China are already down by more than 50% from their 2017 peak.”

Challenges abound, of course,and they include building greater trust among mainland consumers.

“China is the global leader in the transition to electric vehicles, but even its carmakers haven’t been able to resolve consumers’ ‘range anxiety,’” says analyst Ernan Cui at Gavekal Research. She argues that households are increasingly demanding hybrid vehicles that burn fossil fuels as backup, meaning the transition to a fully electric fleet will be slower than the most optimistic forecasts.

Nor is the Chinese market devoid of risks as 2024 opens. “Investors remain cautious as China’s auto market has had a volatile start to the year as competition and macro uncertainties persist,” says analyst Tim Hsiao at Morgan Stanley.

Chinese EV demand is seen cooling as the nation’s post-Covid rebound continues to disappoint. As consumer sentiment and demand stagnate, automakers may find it becoming harder and harder to hit this year’s sales targets. In the first week of January, mainland EVs came in short of expectations, falling 20% on the month, according to Citigroup analyst Jeff Chung.

That means that even BYD “will need to refresh its model lineup or have more competitive model launches given the challenging sector competition into 2024,” notes analyst Shelley Wang at Natixis Asia.

The Warren Buffett-backed company also risks a continued price war with Tesla as buyers “continue to expect ever cheaper cars.” When the price-cutting has to stop, that “may keep consumers from purchasing.”

Yet, some are far more optimistic about the performance of China’s “new economy” sectors, which drive 12% of gross domestic product, helping growth top 5%. “Together with strong performance across new economy sectors, such as EVs and high value-added manufacturing, this should help to support a broadening in China’s economic recovery,” says economist Carlos Casanova at Union Bancaire Privée.

Casanova notes that “more easing is still required to stabilize activity. Fiscal policy stimulus will take over from monetary policy stimulus in 2024, although both will have to be deployed in 2024.”

Last year, Casanova notes, the government delivered targeted support measures, including approximately 2% of GDP in additional fiscal spending for 2024. The People’s Bank of China also injected liquidity via open market operations. A rate cut is less likely, although there is ample room to reduce reserve requirement ratios this year.

Clearly, in any event, China is increasingly committed to developing its green economy. “This policy promotion has already crowded investment into green sectors such as solar, batteries, and EVs,” says Herbert Crowther, analyst at Eurasia Group. “Green loans expanded by 36.8% in 2023, with new market entrants ranging from traditional manufacturers and local governments to fossil energy companies and large state-owned enterprises.”

China’s EV industry growth fueled a 20% expansion in private auto manufacturer fixed asset investment in the first three quarters of the year, Crowther says.

The auto sector outperformed national export and industrial value-added growth in 2023. This surge, Crowther says, was largely powered by EVs – which accounted for 42% of Chinese auto exports over the past year (up from 30% in 2021) and 27% of auto production volume (up from 12% in 2021). Private sector manufacturing investment increased overall by 9.1%, despite the 0.3% contraction in overall private spending.

As China raises its economic and innovative game, the interesting question is what alarm bells – and responses – are triggered in Japan. Competition is always a positive dynamic between Asia’s two biggest economies. In the EV space, Japan is about to get more than it ever bargained for.

Islamic lifestyle startup TheNoor to move HQ to Saudi Arabia

By: Mary Blight

On: November 29, 2023

In: Technology

Malaysian startup inks partnership with Taibah Valley a Medina based VC
Relocation is part of efforts to support the Kingdom’s Vision 2030 program

Taibah Valley, the Saudi Arabian based investment arm of Taibah University in Medina, has announced its partnership with TheNoor, a Malaysian leader in technology and Islamic lifestyle that involves moving…Continue Reading

9 Budget 2024 recommendations as rocket fuel for Malaysia’s SoonicornsÂ

By: Mary Blight

On: September 23, 2023

In: Technology

Critical to offer visas for foreign students who study in local universities
Time has come to implement a Local Technology Procurement Framework

“Soonicorns” or “Soon-to-be-unicorns” are late stage technology companies most of whom have raised venture capital funding and have the potential to become unicorns.
These late stage companies have gone beyond the…Continue Reading

Setting sights on Southeast Asia | FinanceAsia

By: Marcus Ching

On: August 29, 2023

In: Asia, Finance, South-East Asia

Global investors have always been drawn to Southeast Asia’s growth story, as one of the world’s fastest developing economies and home to a relatively youthful population of 600 million.

This year’s Asean Summit chair, Indonesia, pitched that the region would continue its role as an epicentre for expansion. Even amid the backdrop of a challenging external environment – from the Russia-Ukraine war, to rising inflation and interest rate escalation – there is still substance behind the Southeast Asian story.

East Ventures, a venture capital (VC) firm based in the region, raised a total of $835 million in the past year across various strategies, achieving in May the first and final close of its debut Growth Plus fund, at $250 million. The vehicle aims to support innovators within the company’s ecosystem of portfolio companies that demonstrate strong potential.

“The successful fundraise shows that with the right strategy, management team and mandate, capital is still available,” Roderick Purwana, managing partner at East Ventures, told FinanceAsia.

The East Ventures team is experiencing promising traction across its portfolio – 60% of its growth-stage start-ups have delivered a positive earnings before interest, taxes, depreciation and amortisation (Ebitda) or are in the process of doing so; and more than 40% have a secured a cash runway beyond 2025. At the end of May, the company had invested in more than 20 start-ups so far this year, across sectors ranging from waste management and mental health, to digital mortgages.

In total, the firm has $1.5 billion in assets under management (AUM) across 12 funds that are active across Japan and Southeast Asia. In the latter, it has invested in over 300 companies and was an early backer of Indonesian start-ups, Traveloka and Tokopedia, which merged with GoJek, in 2021.

The firm sees particular opportunity in Indonesia and is among the most active in the market, even though Purwana admits that pace of activity has slowed due to market sentiment.

Money continues to flow into Southeast Asia, as evidenced by the accumulation of $10.4 billion in the region’s start-up ecosystem, in 2022. According to Cento Ventures’ recent Tech Investment report, last year marked the strongest performance of the market for three years on record. In spite of a global slowdown, it finished up on par with pre-pandemic investment levels.

“Southeast Asia will face or is already facing a correction, but the ramifications of this are not as profound as those being experienced by other emerging regions like Latin America and India,” Dmitry Levit, partner at Cento Ventures, told FA from Singapore.

“It remains to be seen whether this contraction is justified by the return to a pre-2022 baseline, or overdone, as a result of investor panic; but as a firm, we take the view that when valuations are low enough, we should invest in such a market.”

Financing the future

Levit and his VC peers remain focussed on digital financial services. It is the fintech sector that they view as key for Southeast Asia, having accounted for 46% of overall liquidity in 2022, according to the firm’s report.

The Cento Ventures team has capitalised on this opportunity through recent investment in Indonesia’s Finfra, which provides embedded finance solutions; and Philippine cross-border payments start-up, Aqwire.

In May, Singapore-based fintech start-up, Jenfi, secured one of the highest fundraising milestones across the region to date, raising $6.6 million in a pre-series B round led by Japan-headquartered Headline Asia. The round also saw participation from existing investors, such as Monk’s Hill Ventures.

“The opportunity in Southeast Asia – especially across traditional working capital and SME loans – is huge. Banks tend to deprioritise this segment as it is riskier, so participation opens up to technology companies like Jenfi, to act as alternative lenders and to offer something that is differentiated but also commercially viable,” said Susli Lie, partner at Monk’s Hill Ventures. She is also the co-founder of ErudiFi, a tech-enabled education financing company.

Jenfi co-founder and CEO, Jeffrey Liu, attributes the firm’s recent successful fundraise to experience. With a background in finance, he founded GuavaPass in 2015, before setting up Jenfi in 2019, alongside Justin Louie. His endeavours in the start-up segment have seen him replicate the process every one to two years.

“I always thought it was a numbers game, but as I’ve built track-record, I’ve realised that it’s more important to focus on quality conversations and connections,” Liu said.

“From start to finish, Jenfi’s pre-Series B capital raise took six months. We had a shortlist of funds that we wanted to talk to from day one, and the fact that investors were already aware of us supported entry into real deal conversations,” he added.

To date, Liu’s firm has raised $40.2 million, which includes $15.2 million in equity, but he thinks it is unlikely that the Jenfi team will fundraise again, before 2024. While he shared that the firm had managed to shield from some of the market challenges during this recent round, unfortunately, this is not the case for the majority of other start-up peers.

Jenfi’s business enables digital native companies – including e-commerce or software-as-a-service (Saas) firms – to scale their ambitions by funding their growth and marketing expansion plans. So far, they have deployed $30 million across 600-plus companies.

“We’ve noticed in the last six months that the VC-backed companies we aim to support are in more challenging positions, in the sense that they have less of a cash runway. We’re hearing that it’s a lot harder for them to secure capital and that there are delays in their overall fundraising processes,” he explained.

Going for growth or pursuing profitability?

This perspective is shared by Lie, whose Southeast Asian VC firm has invested in early-stage technology companies since its foundation in 2014. Reports indicate that Monk’s Hill Ventures has raised at least $380 million across three funds and it has invested in over 40 fast-growing technology companies in Southeast Asia, including Singapore logistics company, NinjaVan; and Indonesian rural e-commerce start-up, Dagangan.

“In this market environment, we see that later-stage deals are taking longer to complete, which means that there is even more of an imperative to ensure as long a cash runway as possible,” she shared.

Before the current cycle, Lie saw deals close in as little as a couple of weeks to a month, but she cautions that this is not the norm. In this environment, she believes that start-ups need cash on balance sheet to support funding for at least 12-months of activity.

“Where our portfolio companies are concerned, the collapse of Silicon Valley Bank (SVB) made indirect impact by way of sentiment. The bank had always been a pioneer in terms of its product offerings and for its activity to be curtailed without anyone else stepping in to take on the whole business, this will alter the flow of capital throughout the entire ecosystem,” said Lie.

“There are fewer investors that are actively deploying compared to the past. For those that are, they want to take a bit more time to conduct due diligence and get to know prospective investments better. Fewer months of runway translates to weaker negotiation power,” she added.

A clear path to profitability is also imperative in this part of a cycle. With it, access to capital remains open; without it, Cento Ventures’ Levit believes that start-ups are exposed to very steep valuation discounts.

Southeast Asia’s top tech companies, Grab and GoTo, which listed in 2021 and 2022 respectively, have yet to show investors that they can stem the red ink. However, this factor is not unique to the region.

“This isn’t a Southeast Asia-specific problem; we see it happening globally, as well. For high-growth tech companies, the path to profitability is a long one,” said Niklas Amundsson, partner at the Hong Kong office of placement agent, Monument Group.

Levit’s perspective indicates that by going for growth, a start-up downplays its push for profitability. However, Purwana believes that both elements are of equal importance and can progress in tandem.

“Sometimes, people think that it’s a question of deciding on growth or profitability, but it shouldn’t be either-or. Ultimately, any company must work to ensure profitability – whether one year, five years or 10 years into existence. They have to be able to turn a profit eventually,” he shared.

Curiosity and caution

As investors seek exposure to start-ups that can sustain growth momentum and pursue profitability, they are keeping an eye on developments in the generative artificial intelligence (AI) space.

KPMG’s 1Q23 Venture Pulse report highlighted investor interest in AI as being relatively robust in Asia. In particular, the sector drew attention during the first quarter of 2023 on the back of the global buzz generated by ChatGPT.

“AI start-ups that can demonstrate potential at industrial scale or in terms of commercial application and adoption – especially in the areas of advanced manufacturing, transportation, energy management, health tech and process optimisation and productivity – will attract investment dollars,” said Irene Chu, partner and head of the New Economy and Life Sciences division at the Hong Kong base of KPMG China.

She underlined that in light of the current tech talent shortage across Asia, the use of AI to improve productivity is more relevant and encouraged, than ever. But with curiosity, comes caution.

“We are excited about the prospect of generative AI as a transformative technology, but we are also cautious around its capabilities and potential negative ramifications,” said Purwana.

East Ventures has been active in the AI space since August last year, when it invested in the seed round of Bahasa.ai, which aspires to build a natural language processing and understanding engine for the Indonesian language. Since ChatGPT has come onto the scene, it has not completed any new investments in the generative AI space, but the segment is one that remains closely watched.

Levit views the space as the “next wave” – an area of tech that every company will need to consider moving forwards: “I have a feeling we will have to fight long and hard against the false dichotomy around AI-based versus non-AI-based businesses, similar to what we first saw with mobile phones; the offline to online transition; and B2B and B2C. The narrative will be stronger than substance in the short-term, but substance will be stronger than narrative in the long-run.”

To unlock its full potential, the region’s tech industry will need to find a new route to innovation, Purwana suggested.

While some view Southeast Asia as a pioneer in the tech space, he feels that “Southeast Asia will have to grow beyond being a ‘copycat market’ for tech, which is a significant gap to address”.

However, he shared that it is reassuring to look at China.

“In the early days of its developing tech sector, China turned to the US for inspiration and duplication. But today, this is no longer the case, especially in fintech sector. In this arena, China is probably more advanced than the US,” Purwana added.

Perhaps one of the best illustrations of this point, is China’s success in leapfrogging the use of credit and debit cards to drive a digital payments revolution, via digital wallets and QR codes. Alibaba (through Alipay) and Tencent (through WeChat Pay) are two of the first-movers to gain status in one of the world’s largest and truly digital economies.

Hong Kong’s offer of the missing puzzle piece

The prospects for Southeast Asia’s start-up scene remain bullish. However, the money being deployed into VC funds largely comes from high-net-worth individuals (HNWIs) and family offices. Asia’s deepest pockets – the institutional investor community – have yet to dip their toes in the start-up scene in a meaningful way, Amundsson noted.

For him, the vital, missing component is: the exit. Many of the region’s top tech companies prefer a US versus domestic listing, as the region lacks an obvious, successful IPO route for up-and-coming technology companies. However, Amundsson does see some opportunity in Hong Kong, which he considers to be further ahead of its Southeast Asian peers in this regard, and continues to advance the development of an attractive and liquid capital market.

On March 31st, new listing rules for specialist technology companies came into play in the special administrative region (SAR). The Chapter 18C regime extends to start-ups active in new economy industries such as AI, alternative energy and agritech. While this is set to attract more listings from outside the China region, analysts expect this only to materialise in the next three to five years.

“I am excited about the new 18C regime launched in Hong Kong because it covers sectors that are going to be transformative, with the potential to solve some of the most challenging problems we face, around climate change, food security and clean energy. Despite the slowdown in IPO activity globally, the new regime offers an attractive platform for those innovative Southeast Asian start-ups that aspire to solve these global issues,” Chu said.

However, while the market capitalisation threshold remains high, it might be some time before these companies list. It also remains to be seen whether Hong Kong’s bourse provides a realistic and viable route for Southeast Asia’s start-up community.

As Asean focusses on finding its next epicentre of growth, the region’s technology sector offers perhaps the greatest opportunity for investors, as it continues to navigate short-term challenges like the collapse of SVB and works to address concerns around the development of next-generation AI.

Reviewing the region’s potential, Lie concluded, “Most of emerging Southeast Asia is moving away from manufacturing towards the service industries, and this is where we’re going to see the adoption of technology that really drives growt

Hong Kong and China interest in AI and regtech âpalpableâ despite soft fintech funding: report | FinanceAsia

By: Marcus Ching

On: August 22, 2023

In: Asia, Finance, South-East Asia

Fintech companies in Asia Pacific received $5.1 billion of funding in the first half of 2023, a further drop from $6.7 billion during the same period last year, a recent KPMG report has revealed.

The figure points to a “very soft” fintech funding landscape in the region, in contrast with $36.1 billion of funding in the Americas, and $11.2 billion in Europe, Middle East and Africa (EMEA), the study showed.

In terms of number of fintech funding deals, 432 were completed in the Apac region, compared with 1,011 in the Americas, and 702 in EMEA.

“The global fintech market has seen challenges, with a decline in both funding and deals,” Barnaby Robson, deal advisory partner at KPMG China told FinanceAsia.

“Public companies have changed materially, with entire industries trading at fractions of previous valuations. But founder expectations have not moved as fast, meaning private valuations are adjusting slowly as companies seek new funding,” he explained.

The report, Pulse of Fintech H1’23, aggregated data from global venture capital (VC), private equity (PE) and mergers and acquisitions (M&A) deals in 2023’s first half, and looked into various segments including payments, insurtech, regtech, cyber security, wealthtech and blockchain.

The largest fintech deal H1 2023 in the region was $1.5 billion raised by Chongqing Ant Consumer Finance, the consumer finance unit of China’s Ant Group, which faced Beijing’s pressure to restructure in compliance with regulatory limits.

“Fintech funding in China is very dry” outside of Chongqing Ant Consumer Finance’s deal, the report noted. Businesses and investors in China tend to prioritise post-pandemic recovery, waiting for outcomes from prior investments, it explained.

Other significant deals in Asia include $304 million raised by India-based Vistaar Finance, and $270 million raised by Kredivo Holdings in Singapore.

Rebound potential

Despite slowing deal activity and slashed valuation, the intrinsic value and potential of the fintech sector in Hong Kong, mainland China, and Asia in general, remained robust, Robson told FA.

Fintech firms in the area are increasingly looking at leveraging artificial intelligence-generated content (AIGC), the report identified.

“In mainland China, the focus on AI in insurtech, creditech and wealthtech is evident. Hong Kong, with its global connectivity, needs to navigate the growing challenges of dealing two different AI regimes and mainland China data onshoring rules. The diverse financial landscape and low productivity in emerging Asia, offers a fertile ground for AI-driven fintech innovations,” Robson detailed.

“AI’s potential to revolutionise fintech segments is undeniable.”

Despite the US and Europe being leaders in regtech, or regulatory technology, interest from Hong Kong and China is palpable, according to Robson.

“With the People’s Bank of China’s (PBOC) recent announcements and Hong Kong’s agile regulatory framework, it’s clear that the region is gearing up for a more transparent and efficient financial ecosystem,” he said.

China’s central bank released a set of draft administrative measures on data security management last month for public consultation, signalling the watchdog’s enhanced emphasis on data processing securities amid geopolitical tensions.

Many financial institutions are embracing regtech to improve the efficiency and effectiveness of addressing compliance and regulatory requirements, Robson noted.

In his view, the confluence of AI advancements, regulatory shifts, and a growing middle class could very likely help catalyse fintech funding in Hong Kong, mainland China as well as the broader Asia region.

But that would be possible only after “a more complete reset in multiples to get to where valuations reflect fundamentals, and market clearing prices exist”.

He pointed to late 2024 or 2025 as a likely timing for such a rebound, citing fintech being properly valued on a realistic discounted cash flow (DCF) or free cash flow (FCF) basis as a contributing element.

“It’s a matter of when, not if,”

Unicorns (Page 2)

A MATTER OF PUBLIC Attention?