Page 23 - CMP3

1.2.1 DIVERSIFIED ALTERNATIVE FUNDRAISING AVENUES
With greater innovation and use of technology, the Malaysian capital market has enabled accessibility in recent years, allowing more Malaysian businesses, in particular small and emerging companies, to fundraise. Malaysia was among the first few countries in the region to introduce new fundraising alternatives to cater to businesses at various stages of growth. This includes the introduction of equity crowdfunding (ECF) and peer-to-peer financing (P2P financing) for working capital needs of small businesses, and more recently, initial exchange offering (IEO) for early-stage entrepreneurs. In addition, onshore venture capital (VC) fundraising for early stage companies has evolved, with more investments into growth-stage companies. Similarly, onshore private equity (PE) fundraising for growth-stage companies has also increased3. Today, Malaysia comes second in PE deal volume in ASEAN4.
Alternative fundraising saw early success, spurred on by a broad range of development efforts, such as the launch of a public-private co-investment structure – the Malaysia Co-Investment Fund (MyCIF) – and the facilitation of alternative intermediation platforms. While still small in size, these alternative fundraising avenues have become a growing source of financing for MSMEs throughout the pandemic, increasing their reach to small and emergent companies by fourfold since inception.
Chart 6
ALTERNATIVE FUNDRAISING LANDSCAPE HAS SEEN GREATER DIVERSIFICATION IN THE LAST DECADE
1,800 100
LEAP (RHS)
Source: SC.
Internal analysis, SC. Source: Preqin.
ECF (RHS)
P2P Financing (RHS)
VC/PE (RHS)
Total no. companies funded (LHS)
1,600 1,400 1,200 1,000
800 600 400 200
90 80 70 60 50 40 30 20 10
-0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
3 4
CAPITAL MARKET MASTERPLAN 3
21
% of total alternative funds raised
Number of companies