The fund is directed to support Malaysia’s Bumiputera Agenda

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Johor Corporation (JCorp), the state-owned investment arm for the Malaysian state of Johor, has joined Axiata Digital Innovation Fund (ADIF), the country’s largest corporate venture capital fund, as an investment partner.

JCorp will invest MRY 10 million (US$2.3 million) which will the total assets under management to MYR80 million (US$18.5 million). ADIF wants to target a fund size of MYR 100 million (US$23 million).

ADIF is a joint venture fund between Axiata Group Berhad and government-owned Malaysia Venture Capital Management Berhad (MAVCAP). Axiata put in MYR50 million (US$11.5 million) and MAVCAP put in MYR20 million (US$4.6 million).

ADIF is managed by Intres Capital Partners – a subsidiary of MAVCAP and a partnership between MAVCAP, Questmark Capital Management and Teak Capital Sdn Bhd.

“We will have the opportunity to integrate some of the solutions provided by ADIF’s startups into relevant aspects of the business, as a quick win which is mutually beneficial,” said YB Dato’ Kamaruzzaman, the President and CEO of JCorp.

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JCorp is a state-owned conglomerate with business in  Palm Oils, Specialist Healthcare, F&B, Property, Oil and Gas, Hospitality and entrepreneurship.

The Bumiputera strategy

ADIF is open about its support for Malaysia’s Bumiputera Agenda and it is major part of the fund’s strategy.

It has been directed to “help build up the capabilities of local digital companies, especially Bumiputeras, to become successful regional and international players.”

ADIF has 13 companies in its portfolio and said 46 per cent of investees are Bumiputera founded. The fund wants that percentage to be closer to 70 per cent in the coming years.

“By 2020, Axiata hopes to nurture and fund a substantial number of Bumiputera and Malaysian digital services businesses with an end goal of building four to five regional champions,” said Tan Sri Jamaludin Ibrahim, the Group CEO of Axiata Group in a statement.

Also Read: Malaysia Digital Hub launches, enables startups to get up close and personal with digital economy global markets

The Bumiputera Agenda (which derives from a word that translates to ‘sons of the soil’ and is used to describe ethnic Malays) is controversial as some question the prudence of creating an ethocentric economic policy.

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