Who is Cradle Seed Ventures (CSV)? Why CSV?

CSV manages the Cradle Seed Ventures Fund 1, a fund targeted as a partnership between the public and private sectors. CSV’s initial RM40 million fund at launch is from the Ministry of Finance, Malaysia, and injected via Cradle Fund Sdn Bhd.

CSV plans to increase the fund in the future by forging strategic partnerships with various private and public sector investors in Malaysia and the region.

CSV is a subsidiary of Cradle Fund Sdn Bhd, an early stage financier and influencer of the Malaysian technology start-up ecosystem. For more than a decade, Cradle has supported over 700 technology start-ups some of which have gone to become regional and global names like MyTeksi (known as GrabTaxi in the greater ASEAN region), iMoney and Piktochart. Not many have a long understanding and hands-on experience in the start up eco-system in Malaysia as Cradle.

CSV is managed by a team with experience in venture investments and have specific interests in start-ups and are in tune with their issues and needs and most importantly, their potential.

What is the investment size and how will it be disbursed? How is CSV different from existing Cradle funding facilities?

CSV targets investments of between US$300,000 and US$1 million per company. Larger amounts may be considered depending on requirements and opportunities.

Depending on structure and terms to be negotiated, CSV may co-invest with other investors as and when the need arises. This allows CSV to better manage, add value and and share the risk, on top of leveraging on each other’s network and expertise.

The investments are directly injected into the company for equity participation and is to be disbursed based on milestones that would have been pre-agreed.

CSV is the first venture fund to be launched by Cradle and will focus mainly on pre Series A and Series A companies onwards.

Cradle still continues to provide grants and in some cases, equity funding, to companies at the earlier seed stages. By extension, CSV targets to invest in a more advanced stage companies at which is larger than the prospects for Cradle recipients

What type of businesses will CSV fund? Which stages of companies will CSV fund?

CSV will focus more on the following select few vertical technologies as our portfolio companies:

  • 1.Internet and mobile technology/ business
  • 2.Software and enterprise solutions
  • 3.Hardware and engineering

However, CSV is mandated to invest in technology companies related to any of the NKEAs which include:

  • 1.Financial services
  • 2.Tourism
  • 3.Business Services
  • 4.Electronics and Electrical
  • 5.Wholesale & Retail
  • 6.Education
  • 7.Healthcare
  • 8.Communications Content and Infrastructure
  • 9.Oil, Gas and Energy
  • 10.Agriculture
  • 11.Palm Oil & Rubber

CSV targets investment in early stage companies that may or may not be profitable at the time of investment, but exhibit a clear path of growth, scale and profitability. Early stage companies in this case will cover the following stages:

  • 1.Pre-Series A: Companies at early stages of commercialisation that may be slightly more advanced than a seed stage company and/or that require more funding than a seed company. Typical investment size may be equivalent to US$300,000 to US$500,000 with post money valuation equivalent to US$1 million to US$2.5 million.
  • 2.Series A: Companies which are at commercialization stage which clear market identification and for early growth. Typical total investment size from the equivalent of US$500,000 onwards to US$3 million with post money valuation equivalent to US$2 million to US$10 million.
  • 3.Series B onwards: Companies which are invested for growth and expansion. However, investments in Series B onwards will only be made based on requirements and/ or opportunities. Typical total investment size from the equivalent of US$3 million onwards with post money valuation equivalent to US$10 million onwards.

CSV will co-invest with others as and when the need arises.

How much equity will CSV take in our investment? Why is CSV taking equity in my company where as it has never been a condition with Cradle before?

CSV invests via equity participation, whereby it will take minority stakes at reasonable valuations in the companies.

CSV manages a venture capital fund with a primary objective and responsibility of providing returns on investment to its investors.

Meanwhile, Cradle is an agency under the Ministry of Finance which provides grants to early stage Malaysian technology start-ups with revolutionary ideas that have the potential to be successful technology entrepreneurs.

CSV actively monitors and tracks developments of the portfolio companies ranging from operational, business development, reporting and governance, finance/ accounting, and human capital; on top of leveraging on each others’ network.

Besides the investment, how else can CSV help develop my start-up business? none

CSV is very much aware of the need to value-add and assist the target companies to grow. CSV invests with a clear objective of being a partner to our portfolio companies and we intend to share our knowledge, expertise, experience and network with the investees.

CSV actively monitors and tracks developments of the portfolio companies ranging from operational, business development, reporting and governance, finance/ accounting and human capital, on top of leveraging on each others’ their network.