MTDC (Malaysian Technology Development Corporation)

MTDC (Malaysian Technology Development Corporation)

Malaysian Technology Development Corporation (MTDC) was set up by the Government of Malaysia in 1992 to spearhead the development of technology businesses in Malaysia. Its initial role was to concentrate on the promotion and commercialisation of local research and invests in new ventures that can bring in new technologies from abroad.

From those investment activities, MTDC has evolved to become a venture capital outfit and has been the leading venture capitalist in the country long before the concept became familiar and accepted in Malaysia.

By the time other new venture capitalists came into being, MTDC has further evolved to become an integrated venture capital solutions provider and has become the only company in the country to attain the status. Today, MTDC is the only one-stop agency where financing can be sourced from; all the way from laboratory ideas to full commercialisation of such ideas.

To date, we have approved grants (under 8th Malaysia Plan) totalling RM120.9 million to 119 deserving local companies and participated in taking up equity stakes totalling more than RM150 million in more than 50 companies – both locally and internationally. Our search for high-tech companies have led us to invest in the United States, Europe and other countries in the region.

Venture Capital & Investment

As at 31 December 2005, MTDC has invested more than RM150 million in both local and foreign high-tech companies. Many of these companies have been successfully listed on Bursa Malaysia.

Over the years, MTDC had established six private equity funds including Malaysian Technology Venture One Sdn Bhd (RM35 million), Malaysian Technology Venture Two Sdn Bhd (RM53 million), Malaysian Technology Venture Two (Agriculture) (RM17 million), Malaysian Technology Venture Three Sdn Bhd (RM75 million), Sumber Modal Satu Berhad (RM10 million) and East Malaysia Growth Corporation Sdn Bhd (RM12 million).

In 2004, the Government created and allocated RM1 billion for the purpose of investment in non-ICT projects. This fund is managed solely by MTDC, in light of its track record and experience in the industry. To date, MTDC has invested RM90 million in seven companies.

MTDC will soon launch the country’s first biotechnology venture capital fund to be known as Malaysian Life Sciences Capital Fund (MLSCF). The fund will be co-managed with our strategic partner, Burill & Co., a life sciences merchant bank based in San Francisco, California.

Investment Approach

We invest in early, developing and late-stage technology-based businesses as a way to manage our risks. To further diversify our risks, we limit our exposure to around 30% equity stake in any investments. This strategy does not only benefit us, but also our investee companies as they can still drive their companies in their own creative ways. Our investment horizon is limited up to five years. Exit strategies include pre-IPO sale, management buy-out and saleback to project promoters.

Investment Criteria

MTDC’s investment criteria focuses on the following:

Non-ICT sector – focusing on life sciences sector
Strategic technologies
High Investment return
Clear and defined business vision
Credible management team
Investment Process

We strive hard to respond promptly and efficiently to all investment opportunities within our approved boundaries. The process kicks off upon receiving a business executive summary from potential partners. Once in place, a six-phase process that will take on an average of 8-12 weeks period will be set in motion. The six-phase process:

Application Requirements

We invest in early, developing and late-stage technology-based businesses as a way to manage our risks. To further diversify our risks, we limit our exposure to around 30% equity stake in any investments. This strategy does not only benefit us, but also our investee companies as they can still drive their companies in their own creative ways. Our investment horizon is limited up to five years. Exit strategies include pre-IPO sale, management buy-out and saleback to project promoters.

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