Malaysia dreams of start-up paradise but Singapore is still more attractive

Start-up founders say there is a mismatch between their needs and the agendas of Malaysian government-linked seed funds

Some venture capitalists say the outlook is improving for start-ups in Malaysia, however, amid a fresh determination to create unicorns

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Malaysia’s Prime Minister Anwar Ibrahim speaks at the KL20 Tech Forum in Kuala Lumpur in April. Photo: Bloomberg

Published: 8:00am, 28 May 2024Updated: 1:45pm, 28 May 2024

Nathalia Lim and her business partner were on the brink of folding their edutech start-up Youthopia in 2023, as funding had all but dried up despite their best efforts to secure fresh investment in Malaysia.

They bootstrapped their way through, helped by a one-off contract to convert parts of a training module into a game format for staff of a local shipping firm, but Lim said it was not an experience she wanted to repeat.

Young Malaysian entrepreneurs say capital is limited at home, and available investment typically goes to well-established firms that have progressed beyond start-up status.

Lim said to fund their latest project Emobuddy, an app-based programme to boost the mental health of children, her team would try their luck in Singapore instead.

“We’re hoping to see what we can get. If [regional superapp] Grab went to Singapore, there has to be a reason,” the 30-year-old founder told This Week in Asia.

Singapore remains one of the region’s top destinations for start-ups and venture capitalists seeking to discover the next unicorn – start-ups valued at over US$1 billion.