Why MDEC Thinks M’sia Can Lead The Charge | Tech Malaysia
- At Wild Digital SEA 2018, hosts Catcha Group kicked off the conference by presenting an optimistic outlook for the tech startup scene in Southeast Asia.
- They predicted a large amount of funding to be made available for tech companies, as well as for these companies to scale rapidly with the amount of support received.
- MDEC then followed by presenting their ideas and plans to help Malaysia-based tech companies reach a level that would make them competitive on a global level.
Kicking off the Wild Digital SEA 2018 conference yesterday, hosts and organisers Catcha Group presented a keynote highlighting the optimistic outlook for the tech ecosystem in the SEA region.
In the presentation, CEO of Catcha Group Patrick Grove alongside his director Dinesh Ratnam detailed their expectations for overall development of the ecosystem and how they expected it to grow.
A comparison was made indicating that the SEA region was on course to emulate China’s tech ecosystem, with SEA in 2019 expected to emulate what China looked like in 2010.
Going into detail, it was shown that the SEA tech ecosystem in 2017 (with its combined market leader valuation of US$22 billion), was comparable to China with its similar valuation in 2008, and that it was on course to keep that parity in 2019—SEA with a combined market leader valuation of US$86.5 billion versus China’s US$94.5 billion in 2010.
Dinesh then went on to present some bold predictions for the scene within the next two years. Some of these predictions were actually first made earlier in the year by Patrick himself, and a great morale boost to be reminded of the bright prospects that await those in the region’s tech ecosystem.
Rapid Growth In The Region
First among their predictions was that private venture funding in the SEA region would heavily skew towards tech funding, with US$10 billion expected to be poured out by investors.
Explaining why they thought that there was this much growth and funding taking place in the region, Dinesh said that they believed it was largely thanks to the rapid advancement of regional internet infrastructures.
“We took a step back and saw that private tech companies really exploded in 2017,” he said. “What we realised was that there was a huge correlation between internet speeds and the number of internet users.”
“As internet speeds become faster, the user experience becomes more enhanced, which leads to more users coming online, which also means more things online,” he added. “This leads to a bigger addressable market for companies trying to venture into the tech space.”
“As the market grows, more capital will be needed to meet the needs of these users. Investors will then see the opportunity, leading to a massive boom in funding.”
This prediction also then tied in with another—that the world’s first decacorn (a company worth US$10 billion) would first emerge from the SEA region.
According to the Catcha Group, they expected that this would again be determined by the rapid growth of internet users within the region and due to China’s role as one of SEA’s most active and generous tech-focused funders (which they also predicted would continue to be the case come 2019).
The other predictions they made were very much in the same mould as the first two—that tech companies could possibly become unicorns within three years of starting up, and that there would be at least two huge-money IPOs and acquisitions (in excess of US$500 million) within the next two years. Along with that, there would be significantly higher government involvement in tech-focused funding.
“We’re participating in probably one of the biggest opportunities in history—the digital sector in Southeast Asia.”
Malaysia As A Stepping Stone
Building upon Catcha’s keynote presentation, Gopi Ganesalingam, the Vice President of Enterprise Development at government-linked MDEC (Malaysia Digital Economy Corporation) then went on to tell the audience how Malaysia itself would fare in SEA’s booming market.
Bringing up the recurring topic of lucrative opportunity, Gopi started by talking about MDEC’s intent to grow global companies out of Malaysia. He said that this would be done in an effort to get a slice of ASEAN’s whopping US$2.6 trillion GDP.
And to grow Malaysia’s influence in the ASEAN market, MDEC—as a body representing the government—would continue to strongly focus on one of its key pillars: building global tech champions.
Gopi said that having companies on a globally-relevant scale would only mean higher revenues, more innovative ideas, the development of better talent, and also more foreign investment in Malaysia. This impetus, he said, has driven MDEC to identify six important growth pillars that are needed to help Malaysian tech startups reach the coveted global status.
- Market access: By identifying and targeting important market players and helping these companies get connected to major stakeholders so they can collaborate and grow.
- Talent building: To become globally relevant, local tech companies need to focus on reskilling and upskilling their workforces to become ready to serve a wider base of customers instead of just being equipped to focus on a smaller, less diverse locale.
- Mentorship: To help these tech companies avoid making the same mistakes that prevented their predecessors from becoming successful. Gopi mentioned that this would also help decrease the learning curve of these companies and prepare newer companies to be ready for the market in a fraction of the time.
- Branding and visibility: Despite having many impressive tech products and offerings, Malaysian companies for the most part are lacking in the branding department. Improving visibility and getting global customers to notice them is vital if they want to go global.
- Capital and funding: Having funds is necessary for tech companies to grow and develop their products. By building a network in which companies can easily find investors, going global becomes a far easier feat.
- Tech support: Smaller tech companies can only do so much on their own. If larger and more established tech giants would be able to lend a helping hand, smaller companies
By focusing on the above six tenets, Gopi hoped that help Malaysian tech companies would be able to grab at the opportunities that were present in the region. For MDEC, these would be nurtured through their GAIN and TITANS initiatives, which are catered to larger-sized scaleups and smaller, newer startups respectively.
“We’re inviting Malaysian-based companies to take advantage of ASEAN,” he said, promoting the local ecosystem as fertile ground for tech companies—especially new ones. “Make Malaysia your stepping stone into ASEAN, and then make ASEAN your stepping stone into the global market.”
With all these impressive numbers being thrown about, it’s quite clear that Malaysia stands to benefit if we play our cards right.
Hopefully with a clear plan being touted, our tech scene can keep pace with the rapid growth going on around us, or maybe even surpass it.
- You can read more about MDEC here, and our coverage on Wild Digital here.