Growing a startup from the ideation stage all the way to ensuring it’s profitable takes more than just resilience and willpower. It requires strategising a path that will adapt and evolve along the way to meet the goals set out from Day 1.
As founders, many aspire to take their startups through and beyond. While aspirations to become a unicorn is very much alive and kicking, the thought to be a public-listed company has been on the rise among founders from the ecosystem. It is no longer a look that only fit conventional businesses, but one that startups are proving they too can achieve. Witnessing their peers achieve this goal is certainly boosting morale among rising founders to take their entity to higher grounds
also show that Malaysia has topped a list of countries for initial public offerings in Southeast Asia with USD 450 million raised in public listings in the first quarter of the year. The study carried out by Deloitte pointed out that Malaysia held 33% of the market share in terms of the IPO proceeds raised, the largest in the region
Over the years local companies such as MR. DIY and Seng Heng were notable companies to have listed post-Covid on Bursa Malaysia, representing the resumption of listing activities. To date, companies such as Malaysian Pacific Industries, Unisem (M), and Vitrox Corporation are some of the listed companies with a valuation of above USD 1 billion.
From the startup ecosystem, Grab which was initially founded as MyTeksi in 2012 has since come a long way and made its debut on New York’s Nasdaq Stock Market in 2021 through a USD 40 billion merger with special-purpose acquisition company (SPAC) Altimer Growth Corp, raising USD 4.5 billion, making it the largest IPO by a Southeast Asian company in U.S. history.
Another notable unicorn, Carsome, valued at USD 1.7 billion, which provides end-to-end solutions to consumers and used car dealers is well on-its way to be publicly listed, preparing for the right window to be listed. Malaysia has also welcomed its 3rd unicorn, ALPS Holding, the country’s first biotechnology firm that is expected to be listed on NASDAQ in the fourth quarter of this year.
Ready To Go Public?
According to PWC, motivations to go public include include the need to access public capital markets and raise money to expand operations or acquire other companies with publicly traded stock as the currency.
Going public will also allow companies to diversify, reduce investor holdings, and provide liquidity for existing shareholders. In other cases, the move will enable companies to attract and retain talented employees and enhance the company’s brand.
The decision to go public would often require companies to assess their readiness for life as a public company objectively. As with many other journeys a founder must take, preparation is vital and, in this case, having the right guidance and expertise in place will help.
Going public will require more than just a ready company, the management is also encouraged to hire the right expertise to better prepare themselves to meet shareholder and market expectations as they move forward.
Additionally, external consultants are able to assist to address ongoing compliance and regulatory requirements, operational effectiveness, risk management, periodic reporting, and investor relations, in return, reducing the burden founders may face.
As there is no one-size-fits-all template for different companies from different sectors, it is important for founders and their teams to look into these criteria to potentially gauge if their company is remotely ready to be listed.
The Journey Towards Listing In Malaysia
For some founders, getting their first leg into the startup ecosystem means leaving a cushy job and stable income, while for others, it could mean taking a leap of faith and into an area where they may have professional experience but also possibly lack the right means to navigate. Despite the odds presented by both decisions, it is only natural to expect a founder to continuously take the next step forward to ensure sustainability of the business.
As more ecosystem founders reach public-listed status, it highlights the importance of having this goal in mind from the beginning of their journey.
The initiative is also part of the Ministry of Science, Technology, and Innovation (MOSTI) Fund Funnel programme, designed to streamline funding options and offer comprehensive support for startups. Furthermore, the partnership with Bursa Malaysia will provide the necessary assistance by connecting startups with necessary advisors and providing listing expense incentives. Conversely, Cradle will play a vital role in providing market intelligence to identify potential listing candidates.
Additionally, Bursa Malaysia has partnered with the Securities Commission Malaysia (SC) to enhance efficiency in the public markets by facilitating a smoother path for IPOs for startups. The SC has committed to offering tax deductions for eligible tech-based companies in the Main and ACE Markets, and plans are underway to introduce capital gains tax for IPOs in Bursa Malaysia.
This year, we will also witness the introduction of a small offering exemption, a collaboration between the SC and Bursa Malaysia in the Capital Markets and Services Act 2007 (CMSA)
The introduction of a new simplified and accelerated transfer process will facilitate a seamless transfer of listings to promote sizeable and quality ACE Market companies to the Main Market.
“By being in the Main Market, it will open opportunities for foreign investors to participate. This should encourage greater foreign participation in our capital market,” said SC Chairman, Dato’ Seri Dr. Awang Adek Hussin during the announcement of the initiative back in 2023.
From one experience to another
A Strategic Move
Norman Matthieu Vanhaecke, Group Chief Executive Officer of Cradle Fund says founders should be exposed to different routes to scale further in the ecosystem, and going public is one of the routes that is open.
With increasing public and private partnerships, the public listing route has been further eased to ensure more accessibility and ease of entry for founders looking to scale. He further shares that with MYStartup being a single-window platform, founders can look beyond just raising funds and find the guidance they need to go public through the platform.
“Malaysia’s ecosystem continues to be vibrant and founders today can enjoy more paths towards success than they ever could before. It is vital for us to guide these founders in familiarising all options on the table before they find the right fit,” Norman shares.
The data provided below is not exhaustive and is derived from the mentioned sources. Should you possess additional information, please don’t hesitate to contact us at mystartup@gmail.com
This article first appeared on MYStartup.