Compelling vision: (From left) Siaw, Chu and Tan at the event. The Cambrian Fund has identified a number of startups which it will be investing in.
KUALA LUMPUR: The Cambrian Fund, a venture capital fund targeted to be RM150mil in size, is set to be launched in October to help local and South-East Asian technology startups focusing on machine vision, artificial intelligence and robotics.
The fund is a joint venture between the co-founders of automated vision inspection equipment manufacturer Vitrox Corp Bhd
, namely, Chu Jenn Weng, Steven Siaw and Yeoh Shih Hoong; with Singapore-based Southern Capital Group Pte Ltd.
Speaking at the pre-launch press conference of the fund, the ViTrox co-founders emphasised that they were doing this on a personal level, and have committed a combined RM30mil to be invested into the Cambrian Fund, with Southern Capital pledging to channel in another RM30mil.
Chu, who is also president and group chief executive of ViTrox, said: “We want to ensure that this fund is inclusive of prominent industry leaders, specifically in the tech sector, and through our conversations with them, several are showing serious interest in joining us, and they will be investing once we have launched the fund.”
While not disclosing the identities of potential investors, he added that approximately RM80mil of the targeted fund size, or just over half of it, has been secured, along with the RM60mil combined contribution from the ViTrox co-founders and Southern Capital.
Chu said the fund will focus on Industrial 4.0 themes, investing in early-stage technology companies whose founders have the right mindset, compelling vision and exceptional execution capabilities necessary to achieve success in a dynamic and competitive global environment, with an eye to turn Malaysia into the Silicon Valley of the East.
Moreover, he said the initiative aligns with the National Semiconductor Strategy, which aims to cultivate a dynamic ecosystem and establish at least 10 Malaysian tech companies with over RM1bil in revenue.
Delving deeper into the motivations behind the setting up of the fund, Southern Capital managing director Kenneth Tan said at the initial stages, the Cambrian Fund will be taking an equity stake in the startups it is investing in, but is leaving the exit strategy options open.
“We are open to these companies we are supporting to be going for initial public offerings if they are successful, or even to be acquired by larger multinational corporations. But for now, we are focused on backing our startups with capital as well as our collective knowledge and network,” he said.
Meanwhile, Chu disclosed that the Cambrian Fund has in fact identified a number of startups which it will be investing in, although he did not reveal who these companies are, while stressing that the fund has a targeted tenure of 10 years, adopting a “seed and growth” strategy.
He is hoping that the startups under the wings of the Cambrian Fund could grow to become unicorns, with a longer view of establishing a tech cluster in Malaysia, utilising his company’s own Vitrox’s Academy in the process.
Of interest, as one could have already guessed, it is not difficult to sense the possibility that the Cambrian Fund may be potentially investing into potential competitors of ViTrox Corp itself.
Chu and Siaw, though, are not worried, with the former commenting that it is important to look at the wider picture, especially since the global technology market is tremendous and is part of the reason the fund is seeking to set up a cluster of successful tech firms.
Siaw, who is senior executive vice-president at ViTrox, chimed in: “We are also looking to change the old-style paradigm and mindset of entrepreneurs that believes if anyone else is in the same industry as us, then they must be our competitors.
“We are looking at ways these companies can become collaborative and synergistic because the size of the market certainly allows for us to do so.”
Furthermore, he said the tech industry itself has too many segments for individual companies to be specialising in, and it is to their mutual benefit to cooperate, helping them to accomplish their respective goals faster instead of merely expecting failures and dropouts.
At the same time, Chu did not rule out that the fund could be investing in ViTrox’s own suppliers or customers, but said it is important that the environment created needs to allow for failure, which ironically outlines the importance of initiatives such as the Cambrian Fund.
“We understand most of the problems that these startups had and will go through, and while some will fail, we are confident that with our assistance, many will be successful.
“All the limited partners will have some stake in the industry and will be able to support each other,” he reflected.
On a separate note, Tan is expecting that the total number of investors into the fund to not exceed 30, while commenting that each contribution disbursement into the startups could range from between RM250,000 to approximately RM20mil.
“The important thing to note is that we are committed to supporting these companies through the various stages of their journey, as there are many opportunities for support along the way. We are beyond just providing them with the first cheque,” he said.
