Government Grants for Startups in Malaysia

by | Jun 22, 2020 | Startup Grants, Funding, Startups | 15 comments

The Startup Grants by Malaysian Government

Startups could always use government Startup grants or in fact any kind of grants! Who doesn’t want free funding/money? Here is a list of grants in Malaysia, specifically for startups. If you would like to add more information, just comment below!

I hope you find a suitable Startup grant to help you achieve your goals. Do note that most Startup grants have conditions attached, they are there to help Startups spend this free money wisely. It is also to prevent startups from abusing grants. These grants are provided by the government to help local businessmen flourish so that the country’s economy as a whole grows faster. If you are interested

If you already have the grants and want to look for startup investment, you may visit our homepage for more information on our Malaysian Angel Investment network.

A Note About Business Grants in Malaysia

For grants that are reimbursement based, be aware that you will need the cash to spend first to be able to claim it back later. This means that you may need a few months of cash flow to sustain the business in the meantime.

While the grants may promise RM500,000 for example, you may have multiple stages of claiming it, and for each stage, if you do not fulfil the criteria agreed upon, you may not be able to claim the fill amounts.

So while the business grants may sound great, it is good to be aware that the grants in Malaysia are typically on a reimbursement basis, and it is good to plan for it. This is so that you can maximise the startup grants for your business, and for it to have the optimum effect for your business.

NEXEA does not provide any business grants in Malaysia, however, the following grant providers do:

Cradle Fund CIP 500 & Cradle 300 CIP Government Grants

Unfortunately, they have closed their startup grants program.

Update 23/6/2020: Cradle has a new grant!

startup grants malaysia cradle

CIP ACCELERATE Grant

This Cradle grant is a programme that provides up to RM 2,000,000. The programme caters specifically to deep tech startups. The programme helps startups with proven systems to commercialise there product.

CIP IGNITE Grant

The CIP IGNITE programme gives out a conditional grant and assistance up to RM 500,000 for tech-based startups, local SME’s or spinoff companies from university research.

For more information:

For further enquiries, email us at [email protected] OR call us at 03 – 4045 8600

MTDC CRDF Grant

Government Grants for Startups in Malaysia

The MTDC CRDF grant provides financial assistance to eligible Malaysian startups to undertake full commercialisation activities of completed R&D.

The CRDF 1 is a partial grant to conduct technology and market validation activities for R&D outputs by any local R&D outputs to be undertaken by local companies. CRDF 1 is a partial grant with a maximum of RM500,000 or 70% of the eligible expenses (whichever is lower). It has a payback rate of 0% of funding amount.

The CRDF 2 is a partial grant for the commercialisation of any local R&D outputs by small and medium-sized companies (SMEs). CRDF 2 is a partial grant with a maximum of RM4,000,000 or 70% of the eligible expenses (whichever is lower) and has a payback rate of 3.5% interest on CPN portion.

The CRDF 3 is a partial grant for the commercialisation of any local R&D outputs from public universities / research institutions or local companies by non-SME / subsidiary of large corporation and public-listed companies. CRDF 3 is a partial grant with a maximum of RM4,000,000 or 50% of the eligible expenses (whichever is lower) and has a payback rate of 3.5% interest on CPN portion.

https://www.mprc.gov.my/finance/commercialisation-of-rd-fund-1-crdf-123

PlatCom Grant

startup grants malaysia platcom

PlatCom’s website is vague, but, they do provide a matching grant last I checked. It is up to RM1m, and it is on a matching grant basis. To get the grant, you first need outside investors to fund 40% of your fundraising, and PlatCom will chip in the remaining 60%. Note that this fund is not for everyone, as it is limited to certain industries (it includes ICT if you’re a tech startup).

RM1,000,000 Matching Grant

Looking for someone to match this grant with? Let us know! We are an angel investor group looking for great Startups to fund.

http://www.platcomventures.com/[email protected]_Impact_Programme_2.aspx

Teraju Superb Grant

startup grants malaysia teraju superb

Skim Usahawan Permulaan Bumiputera or SUPERB is an RM100 million grant fund to finance Bumiputera start-ups. Each team of entrepreneurs has to go through a business challenge by pitching their ideas for funding approval. There are 4 application windows throughout the year.

RM500k for Bumiputera Startups

http://www.teraju.gov.my/skim-usahawan-permulaan-bumiputera/

MDEC SME Business Digitalisation Grant

Government Grants for Startups in Malaysia

Based on the 2020 budget, the MDEC has set up favourable provisions for digital adoption as the government is actively encouraging more local business to move rapidly into the technology sphere.

The Government will provide a 50% matching grant of up to RM5,000 per company for the subscription of the above services. This matching grant will be worth RM500 million over 5 years, limited to the first 100,000 SMEs applying to upgrade their systems.

MDEC Smart Automation Grant (SAG)

Government Grants for Startups in Malaysia

A critical part of Pelan Jana Semula Ekonomi Negara (PENJANA), the #SMART Automation Grant (SAG) is a matching grant for services companies to allow them to automate their business processes and move towards digitalisation.

Each successful application will receive up to 50% of the total project cost, subject to a ceiling limit up to RM200,000 or, whichever is the lowest, through this matching grant.

FAQ about Startup Grants in Malaysia

What are the main sources for startup funding in Malaysia?

There are six main sources of startup funding in Malaysia: government funding, crowdfunding, angel investors, venture capitals, self-financing and bank loans.

How to optimise the startup’s funding strategy in Malaysia?

The most important thing that a CEO or founder has to do to optimise their funding strategy is to value their startup correctly. Contrary to popular belief, startup valuations cannot be modelled positive linearly with time.

Instead, startup valuations are usually done based on risks and returns. The valuation generally increases in chunks rather than linearly, depending on the milestones that the business has reached or is going to reach. Therefore, successfully valuing a startup is integral for optimising a startup’s funding strategy.

Can foreign startups apply to Malaysian startup grants?

Unfortunately, most if not all Malaysian startup grants are exclusive to Malaysian residents. However, if a Malaysian is the majority owner of the foreign startup, they can apply to the Malaysian startup grants.

What is the general method for applying for startup grants in Malaysia?

Although not all startup grants have the same application method, you would usually have to go through the individual government organisations that provide those grants you are looking for. The startup CEO/Founder would have to give them a call before visiting them to ask for requirements. These requirements usually involve filling in the required forms and sending in the requested documents.

Should I approach government or private VC firms for funding in Malaysia?

Naturally, VC firms usually fund startups in Malaysia more than government grants. However, it is important to note that government funding is not restricted to grants and can entail anything from loans to investments. Therefore, approaching either government or private VC firms is usually dependent on what the needs of the startups themselves.

Useful Startup Investment Resources

https://www.nexea.co/equity-crowdfunding-ecf-malaysia-investment/

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<a href="https://www.nexea.co/author/nexea/" target="_self">Ben Lim</a>

Ben Lim

I am the Founder/Partner at NEXEA, a startup investment group in Southeast Asia. We have invested in idea stage to early stage investments around the region.We fund the best Founders and provide them with a certain edge via mentoring by the best investors (look them up!).

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15 Comments

  1. Jacky Tee Zhe Khong

    Hi, there. I’m Jacky. I’m running a social Impact Startup at Iskandar Malaysia. Would like to know more on how to apply grant in Malaysia?

    Reply
    • Ben Lim

      Hi Jacky, usually you would have to go through the individual government organisations that provide those grants you are looking for. Give them a call before you visit them to ask for requirements. They usually have forms you need to fill.

      Reply
  2. Ben Lim

    Great news guys,
    Cradle has announced a new grant called CIP300. I have edited the article above to reflect the new grant/funding from the Malaysian government arm. Note that this is funding for startups in Malaysia only.

    Reply
  3. KH

    Hi, I was just wondering if you know in 2018, how much of the capital fundings to early stages investments are from government related fundings? What’s the ratio between government fundings as compared to private VC firms fundings?

    Reply
    • Ben Lim

      Hi KH,

      Naturally, there would be a lot more VC funding vs Government grants. However, what both figures are, we don’t know.

      As you mentioned government funding, this could include lots of things including grants, investments, and not only for Startups but also for SMEs, corporates, etc.

      Reply
  4. Henry Ng

    I am planning to start up a shrimp culture farm, any grant can recommend to me?

    Reply
    • Ben Lim

      Hi Henry,

      We do not know of other grants apart from those in this list as we deal with tech Startups only. Best of luck!

      Reply
  5. Rasul

    Hi.
    Can foreign startups apply to this grants if they want to expand their business into Malaysia by opening branch?

    Reply
    • Ben Lim

      I am afraid it doesn’t quite work like that usually. Not for those that are expanding in usually.

      Reply
  6. shekar moorthi

    hi, would like to start a online platform for developers to sell their units base on several features that we will be implementing. Currently we are in the midst of getting the quote from the platform developer. Do you provide grants for this type of approach?

    Reply
  7. Zainuddin

    Hi I am Zainuddin, we have a plan to develop a platform which will digitalise normal process into central platform based web. We need a seed fund in terms of grant. What can we do?

    Reply
    • Ben Lim

      You may try all of the options above! Family & friends funding, angel investor funding as well. Accelerator programmes are good too.

      Reply
  8. Shah

    Hi ,my company currently is conducting build a new medical devices with the advancement technology, is it eligible to participate in NEXEA programme, if yes could you provide further information, thanks you.

    Reply

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