This article first appeared in Wealth, The Edge Malaysia Weekly on November 24, 2025 - November 30, 2025

Cradle Fund Sdn Bhd — the focal-point agency for Malaysia’s early-­stage start-ups under the Ministry of Science, Technology and Innovation — is preparing to launch a new venture capital fund.

The fund will be managed under Cradle’s venture arm, Cradle Seed Ventures (CSV), and will be its first new investment vehicle since CSV Fund 1 was established in 2015.

Cradle CEO Norman Matthieu Vanhaecke says the team is now engaging prospective limited partners (LPs) to establish the follow-on fund and is aiming for launch in 2026.

Vanhaecke says: “We’re planning to set up our next fund and several investors have already expressed an interest. We’re hoping to close it out next year but are still open to any other LPs that want to come in. It can be one of the other channels that we can flow from the grant programme itself into this one.”

The exact size and focus of Cradle’s second venture fund are still “in the planning phase” and depend on the LPs’ priorities.

CSV, Cradle’s venture capital arm established in 2015, was set up with the aim of investing between RM1 million and RM3 million in promising, scalable start-ups. Vanhaecke says its performance has been positive and “above course”, though the official internal rate of return and distributed-to-paid-in figures remain confidential until the fund closes. “The track record is positive and some of the investments that we’ve done, such as Involve Asia, are all very, very strong companies,” he says.

CSV Fund 1 focuses on early-stage Malaysian start-ups with active holdings, such as Involve Asia, HealthMetrics and StoreHub.

Involve Asia, a digital marketing platform assisting brands and partners in scaling their online earnings, had raised US$14.26 million with a post-valuation of US$85.64 million as at February 2023, according to financial data company PitchBook.

HealthMetrics, a healthtech firm that offers enterprise software-as-a-service for employee health benefits management, had raised US$16.64 million — with a US$35.11 million post-­valuation — as at December 2024.

Meanwhile, StoreHub, a cloud-based point of sale software provider for retailers, had secured US$51.28 million in total funding.

According to PitchBook, CSV Fund 1 has had five exits, including that of PouchNATION — an event management platform that assists organisers in managing large events — which was acquired by Singapore-based sales software company Lantern.ai in August 2023.

There is also SUPA, a data labelling platform that utilises artificial intelligence technology to label images, text, speech and video clips that was acquired by TDCX.

Cradle’s equity portfolio includes a direct-equity programme established in 2017, with the agency investing directly in start-ups in exchange for equity.

Cradle is well-known for providing non-dilutive grant funding through the Cradle Investment Programme (CIP), comprising CIP Spark and CIP Sprint. These grants help founders move from idea validation to commercial readiness without having to give up equity.

Over the past 20 years, Cradle has disbursed more than RM255 million in grants, generating more than RM1 billion in GDP contributions. It has the highest commercialisation rate among government grant programmes, with 76.2% of funded projects successfully commercialised.

Each year, Cradle receives between 500 and 600 grant applications, but only about 100 start-ups are approved, says Vanhaecke.

“When they complete the one-year disbursement programme, they will go into a three-year monitoring programme, where we will monitor and support their growth. Wherever we can, we will try to tie them up with the right people within the ecosystem to help them grow further or to raise funds.”

Cradle’s ecosystem-building initiatives play a critical role in bridging the gap for start-ups that do not receive funding. Vanhaecke says it has alternative sources for these start-ups, directing them to angel investors, crowdfunding platforms or early-stage venture capital funders.

He adds that Cradle has been engaging with family offices, a source of private capital showing growing interest in the start-up investment space.

The agency also acts as a “deal-flow engine” for Malaysian venture capitalists, working at the early stage of a start-up. Vanhaecke explains that anyone with an idea can apply for CIP Spark to develop a prototype and, once market-validated, apply for CIP Sprint to launch the product.

The next phase is growth, where the venture capital ecosystem steps in to fund and support expansion into new markets. After that stage, private equity investors take over, paving the way for a potential public listing.

Cradle is also developing investment networks such as the Zenith International Investor Network, founded through a partnership between Cradle and Yayasan Dato’ Malaysia. Zenith focuses on high-impact investing in Asean’s strategic ventures and acts as a gateway for investors seeking early access and influence in the region.

Cradle is seeking partners for MyStartup VentureX, a technology-matching programme designed to connect foreign innovators looking to establish a presence in Malaysia with local technology companies.

The goal is to form collaborations that can help develop Malaysian-based technology giants, says Vanhaecke.

MyStartup VentureX is a collaboration between Cradle and the Malaysian Research Accelerator for Technology and Innovation (MRANTI). The programme involves business matching, technology commercialisation, company establishment and intellectual property registration, with Cradle serving as a facilitator.

“Cradle’s role is to provide a support programme to match and accelerate them. MRANTI provides the soft-lending programme to bring them into Malaysia,” says Vanhaecke.

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