KUALA LUMPUR (Nov 14): The Ministry of Finance (MOF) said on Thursday sovereign wealth fund Khazanah Nasional Bhd will continue to fund start-ups despite losses from its investment in e-commerce platform FashionValet Sdn Bhd.
In a written parliamentary reply, the MOF emphasised that venture capital investments remain within Khazanah’s mandate. The sovereign wealth fund will continue to support the start-up and venture capital ecosystem, while strengthening its control mechanisms.
“Khazanah has allocated a dedicated fund through the Dana Impak (Impact Fund), aimed at investing to enhance economic competitiveness and build national resilience, while generating socio-economic benefits for the people, particularly for start-ups and venture capitals,” it said.
The MOF was responding to a supplementary question from Bukit Bendera MP Syerleena Abdul Rashid, who inquired whether, in light of the RM43.9 million loss incurred from investments by Khazanah and Permodalan Nasional Bhd (PNB) in FashionValet, Khazanah would reconsider investing in start-ups or adopt a different strategy within the industry, and whether this would affect the fund’s commitment to venture capital investments.
According to the ministry, one of Khazanah’s initiatives to support this mandate is the establishment of Jelawang Capital as a “national fund-of-funds” with a RM1 billion commitment to bolster Malaysia’s venture capital ecosystem through the Impact Fund, as announced in Budget 2025.
Additionally, the Emerging Fund Managers’ Programme (EMP) and the Regional Fund Managers’ Initiative (RMI) will be launched under Jelawang Capital’s management.
“In this context, it is appropriate for Khazanah to continue investing in the venture capital ecosystem, in line with the Madani Economy mandate, to support the overall development of the national economy,” it said.
The MOF further clarified that Khazanah’s investment in FashionValet was made seven years ago and since then, the government-linked investment company has revamped its approach to investment decision-making. The investment selection process has been tightened, particularly for start-ups and venture capital opportunities.
The MOF also acknowledged that venture capital investments come with inherent uncertainties. While these investments carry high risks, the primary goal is growth and successful ventures have the potential to yield substantial returns.
“For example, Khazanah’s investment in local dairy business Farm Fresh Bhd (KL:FFB) is part of its venture capital investments, yielding returns of more than 13 times, amounting to over RM800 million,” it said.
Last month, the MOF disclosed that Khazanah had invested RM27 million in FashionValet in 2018, while PNB invested RM20 million. Both companies exited in 2023, selling their combined stakes to NXBT Partners Sdn Bhd for just RM3.1 million.
The founding couple of FashionValet have since been summoned by the Malaysian Anti Corruption Commission (MACC) for several suspicious account transactions related to FashionValet, and several of their personal and company bank accounts, valued at RM1.1 million, have been frozen.
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