By ScaleUp Malaysia – 16 APR 2020
HOW SCALEUP MALAYSIA WENT VIRTUAL TO PICK ITS 10 STARTUPS – RM2 MILLION FUNDED AT TIME OF COVID-19
Not only startups have to pivot at this time to find a product-market-fit but investors also have to improvise to seek out the businesses they want to back.
ScaleUp Malaysia, an accelerator which focuses exclusively on growth stage companies in Malaysia, had set a timeline of April 15 to pick the 10 companies it wanted to invest in. Its plan was to invest RM200,000 (US$46,400) in each company to grow and scale their business further with a focus on regional and global expansion.
But then came the Malaysian MCO (Movement Control Order) which basically saw the country go into lockdown mode from mid-March.
“We thought we’d wait till end of March but then the lockdown was extended and so we asked, how do we do this? Do we delay the investments or do we do it anyway?” said general partner Aaron Sarma.
The decision made by the six individuals who form ScaleUp was to go ahead. Said Sarma, “We felt it was the right thing to do, to help startups, at this time. Startups are low in the priority of governments to help during Covid-19 and a lot of them are struggling, we thought we should create positive news.”
And so they trained the 20 startups that had been selected as part of its Cohort 1 in December 2019 to do virtual pitching on Google Hangouts. “We coached them on how to do a virtual pitch, gave them tips such as lighting in the room, call from a quiet place, how to position yourself …
“It’s hard to do a virtual pitch – to pitch without feedback. You can’t read the crowd but after about four dedicated sessions of coaching, the net result was pretty solid – the pitches were on point.
“The final decision was not easy but ultimately our investment committee selected companies with teams and products that were best positioned to scale into large markets.”
One travel company made the final cut – Tripcarte, a travel technology company that provides a distribution platform for travel activity and attraction tickets. (Featured image shows Parthiven Shanmugan, founder of Tripcarte, making his virtual pitch)
Asked why it would invest in travel at this time, Sarma, who was the founder of tours and activities startup, Touristly, which was acquired by AirAsia, said, “Yes, a lot of people say it will be a long recovery for travel but in this case, their business was good before Covid-19 and the founder is solid. It started off as a B2C company but he’s discovered an angle in the B2B side of things, creating solutions that can be slapped onto other solutions to issue tickets.”
Clearly, Sarma also has enough domain knowledge to feel confident about this bet in travel.
The other nine startups are:
• ATX, a digital payments service provider, that provides a solution to help micro SMEs participate in the digital economy.
• AutoCraver, a cloud-based end to end management software called “Turbo” for car dealers to automate processes and facilitate car sales.
• Batik Boutique, a premier Malaysian gift brand with an artisanal story that creates social impact by empowering the B40 segment through education, training and job creation. During Covid-19, it is helping governments make PPE (Personal Protective Equipment).
• GOLOG, an on-demand cold chain logistics platform that uses data and machine learning to digitise the traditional supply chain. With logistics disrupted by Covid-19, this startup stepped in to solve distribution problems for farmers in Cameron Highlands wanting to reach customers in Kuala Lumpur.
• Iimmpact, an out-of -the-box technology solution that enables digital payments to over 100 billers inclusive of mobile top-ups, utility bills, entertainment portals, local councils and many more.
• Kwikcar, a peer-to-peer car sharing platform that aims to change the future of mobility and car ownership.
• AOne, an educational platform for learning centres to manage their classes, teachers and students through scheduling, fee collection and process automation. Covid-19 has also prompted it to set up training centres to run remote learning classes.
• BiiB, a community platform that creates gamified virtual events for runners and transforms running into a team sport. With Covid-19 forcing people to stay home, it has adapted its platform to offer “run on your treadmill” and has plans to organise a virtual race.
• Agiliux, a cloud based core insurance platform with extensive policy and claims management capabilities.
Sarma said ScaleUp, an independently-funded accelerator, was set up to address the gap in the Malaysian startup ecosystem – that gap between startup and scaleup. “We do have a lot of new startups that come up in Malaysia but they just disappear. They take a grant and we never see them again. So we asked, what is the issue? The problem is after they have launched the product, many struggle to go up the next level – how to build corporate partnerships, marketing funnels.”
Sarma, and his five partners – Dr. V. Sivapalan, Renuka Sena, Tay Shan Li, Andre Sequerah and Xelia Tong – feel they can add value in the growth stage, and they also believe that a crisis can sometimes bring forth good investment opportunities.
“We are a mix of entrepreneurs and industry veterans in the Malaysian ecosystem.
We are completely privately funded. The fund for cohort 1 is from individual angel investors and future cohorts may be opened up to corporate investors as well.
“We feel there are opportunities we can take advantage of and change the ecosystem in Malaysia.”