A unit of publicly-listed IP E-Game Ventures Inc. on Tuesday said it signed an initial deal with Malaysian investment firm Emissary Capital Growth Fund 1 LLP to set up a venture capital arm that will create a $50-million fund.
The company said its unit, New Wave Strategic Holdings Ltd., and Emissary will form a joint venture to serve as general partner to manage the fund’s investment decisions, which will mainly focus on Malaysia and the Philippines.
New Wave will invest up to $7.5 million as a limited partner. Its focus “is geared towards building a stronger Malaysia-Philippines corridor for technology and venture capital,” the company said in its disclosure.
With both countries harnessing the digital economy to hasten Covid-19 recovery, the investment firms are keeping a bullish outlook on Malaysia and the Philippines as growth hubs especially for tech-based startups, the company said.
“We are looking to strengthen the corridor between Malaysia and the Philippines, as well as with the rest of Southeast Asia. Technology businesses today must have a regional outlook and entrepreneurs must demonstrate ability to scale this way. Our fund is looking to invest in Southeast Asia’s growth companies led by founders that have proved resilience and success,” Enrique Gonzalez, New Wave director, said.
Gonzalez is also a partner of SB Kaikaku Fund, which has invested in early stage technology companies in the United States and Southeast Asia.
Martin Lichauco has joined the board of directors of New Wave due to his track record in the venture capital and private equity space.
Kuala Lumpur and Manila are seen to be among the top emerging start-up ecosystems in the world, ranking 11th and 31st, respectively, based on the Global Startup Ecosystem Report 2020.
Despite the disruptions of the pandemic, fintech is a common sub-sector strength identified in the report by both markets, evidenced by the proliferation of e-wallets and digital payments-focused business models.
Other strong sub-sectors noted are Malaysia’s e-sports thrust and the Philippines’s high e-commerce demand.
In 2019, the Philippines enacted the Innovative Startup Law which aims to incentivize micro, small and medium-sized enterprises in the country, while Malaysia has been working towards enabling businesses to innovate through the Malaysia Digital Economy Corp.