Hong Leong Bank & MBAN Collaborate To Support Local Start-Up

Hong Leong Bank Berhad (“HLB” or “the Bank”) today announced a two-part initiative that sees the Bank join forces with Malaysia’s official trade association and governing body for angel investors and clubs, the Malaysian Business Angel Network (“MBAN”). Aimed at supporting the local entrepreneur and start-up ecosystem in the technology space, this collaboration is Malaysia’s first public-private partnership (“PPP”), where HLB will be working closely with MBAN to promote the local ecosystem, specifically in supporting mentorship and developmental programmes for startups. Amongst the specific areas of technology in which HLB will be looking at are customer experience, analytics, productivity and digital solutions which promote innovation in the financial industry.

In addition, HLB and MBAN will also be rolling out a startup mentorship programme called the HLB LaunchPad by end 2016. The programme is targeted at nurturing the next generation of local startups selected via a pitch and grant process.

Present at the event were the Group Managing Director and Chief Executive Officer of HLB, Domenic Fuda, the Chief Executive Officer of Cradle Fund Sdn. Bhd (“Cradle”), Nazrin Hassan, the President of MBAN, Dr. Sivapalan Vivekarajah as well as senior leaders from the local startup and angel investing community.

“HLB is very excited about this collaboration. Not only is this the first for the industry, it is also the first time we are venturing into mentoring the startup space. As a Bank that has a strong entrepreneurial heritage, HLB has positioned itself in the Small and Medium Enterprise (“SME”) segment and has, since our establishment, been committed to catering to the needs of this business community. We believe that this collaboration will play a role in creating a vibrant entrepreneurial and young startups community, reinforcing HLB business banking heritage”, said Domenic Fuda, GMD and CEO of HLB.

He added, “Our advantage as an SME-focused bank puts us in a unique position to build on our existing competencies in catering to businesses of this size, whilst having access to an ecosystem of innovative individuals and startups will enhance the Bank’s ability to innovate and digitize in a rapidly evolving banking landscape”.

“MBAN is extremely pleased to be partnering with HLB to further develop and grow the Angel and Entrepreneurial ecosystems in Malaysia. As the organisation that represents high net worth investors in Malaysia, we are in alignment with HLB’s aspirations to be a key enabler of the Malaysian ecosystem. Technology and new models are already disrupting society and the economy in a big way and this partnership presents opportunities for us to tap onto HLB’s networks and community to ensure that such disruption brings positive results for the nation while also providing an opportunity for our members to invest in SMEs that will be part of this disruptive growth.

We will also play a major role in the accelerator program especially since our members have extensive entrepreneurial and investment experience that we can share with the selected companies. We believe this is the beginning of a fruitful and successful relationship with HLB,” said Dr. Sivapalan Vivekarajah, President of MBAN.

To complement HLB’s collaboration with MBAN, the Bank will be rolling out a mentorship and grant-based programme called the HLB LaunchPad by end 2016. With the support of Cradle, this collaborative effort will enable HLB to bring on board and nurture Malaysia’s next generation businesses.

“Whilst the assessment and nurturing processes are critical, access to the financial infrastructure and knowledge of navigating the monetary aspects of ideating, developing, commercialising and building a business are equally as important. We also understand that independence is important to allow these startups to flourish. As such, this will be one of the first of such programmes where a grant is provided to technology entrepreneurs to commercialise their innovative technology products or services, helping the business in its initial stages of development. These are areas where we see ourselves bringing value,” Domenic concluded.

Hong Leong Bank Berhad is one of the leading financial services organisations in Malaysia. With a heritage of more than 100 years, it provides comprehensive financial services covering consumer banking, business banking and trade finance, treasury, branch and transaction banking, wealth management, private banking and Islamic financial services. Its merger with EON Bank Group in 2011 has further embedded its position as a core banking franchise with an expanded distribution network of more than 300 branches across the country.

With a proven track record in value creation and a highly recognised brand, Hong Leong Bank has also been extending its footprint in the region, with branches in Singapore and Hong Kong and wholly owned subsidiaries in Vietnam and Cambodia. In China, the Bank has a 20% shareholding in Bank of Chengdu Co., Ltd., Sichuan and a consumer finance joint venture.

Hong Leong Bank is a subsidiary of Hong Leong Financial Group Berhad, the financial services arm of the Hong Leong Group. Apart from banking, Hong Leong Financial Group is involved in the provision of insurance and takaful, as well as investment banking, unit trust, fund management and stock broking services.

The Malaysian Business Angel Network (MBAN) is the official trade association and governing body for angel investors and angel clubs in Malaysia. It is registered with the Registrar of Societies in accordance with Section 7 of the Societies Act 1966 with the Reg. No. PPM-016-14-03122014 on 03 December 2014.

It is a private sector led, not-for-profit that focuses on accrediting individual angel investors and angel clubs promoting and creating awareness for angel investing, building capacity amongst its members as well as sourcing and managing ‘deal flow’ for the same.

MBAN’s vision is to become the official voice of the Malaysian angel investor community as well as a platform for engagement and knowledge sharing for domestic, regional and international angel investors.

Cradle Fund Sdn Bhd (Cradle), an agency under the Ministry of Finance, Malaysia is the organisation that manages the Cradle Investment Programme. The Ministry of Finance had allocated RM100 million to Cradle for this programme since it began in 2003. The agency was awarded an additional allocation of RM175 million for the 2011-2015 period, under the 10th Malaysia Plan.

Cradle now runs two programmes, the Cradle Investment Programme (CIP) which offers two types of conditional grant – pre-seed (CIP Catalyst & U-CIP Catalyst) of up to RM150,000 for funding development; whilst the seed grant (CIP500) of up to RM500,000 for commercialisation of technological ideas and companies, and the Coach and Grow Programme (CGP), a market-driven programme to train entrepreneurs.

It also administers the Angel Tax Incentive, which was designed for angel investors to be accorded a tax deduction of up to RM500,000 in the third year (after 2 years) of their shareholding in the newly invested companies to stimulate and encourage angel investments from the private sector into technology based start-up companies in Malaysia.

The organisation has been expanding its capacity by venturing in co-investment partnership. It aims to forge co-investment partnership with local and global investors and this will also provide Malaysian technopreneurs the stronger support they need to take their ventures to global markets without having to leave Malaysia in search for investors.

Since its inception, Cradle has benefited over 700 Malaysian tech start-ups and the number is increasing. A few Cradle entrepreneurs have grown to raise further amounts of funding among them taxi-booking app, MyTeksi (Grabtaxi), finance-comparison website, iMoney, bus ticket selling appl, CatchThatBus and many more.

Cradle also holds the highest commercialisation rate among government grants in the country – 58%.

Cradle Seed Ventures (CSV) is a subsidiary of the venture capital arm of Cradle Fund Sdn Bhd focusing on early stage venture fund based out of Malaysia. CSV has added strength of being able to leverage on Cradle’s experience in supporting early-stage startups, understanding their funding and operational needs and also be by their side when they scale in their local Malaysian market and to foreign shores.