Kuala lumpur: Sovereign wealth fund Khazanah Nasional Bhd continues to play a critical role in Malaysia’s venture capital ecosystem, promoting entrepreneurship and driving future economic growth, despite recent challenges such as the financial losses from its investment in FashionValet Sdn Bhd. The fund’s ongoing commitment to supporting promising startups is vital for the development of innovative economic engines.
According to BERNAMA News Agency, Putra Business School Professor Dr. Ahmed Razman Abdul Latiff emphasized the importance of Khazanah Nasional’s active involvement in the venture capital ecosystem. He argued that recalibration, rather than withdrawal, is essential, advocating for stronger governance and co-investment partnerships focusing on sectors with strategic national value. Dr. Razman highlighted that abandoning the venture capital ecosystem could jeopardize Malaysia’s ability to nurture innovation and future economic growth engines.
Bank Muamalat Malaysia Bhd chief economist Dr. Mohd Afza
nizam Abdul Rashid echoed the significance of Khazanah Nasional’s role in promoting entrepreneurship. He noted that investments inherently carry risks and require a high tolerance for failure, with exit strategies typically involving stock exchange listings. Dr. Afzanizam stressed the importance of monitoring and clearly defining a cut-loss policy to minimize potential losses.
In 2018, Khazanah Nasional and Permodalan Nasional Bhd invested RM47 million in FashionValet, with Khazanah’s portion amounting to RM27 million. Last year, the stakes were sold for just RM3.1 million, leading to Public Accounts Committee (PAC) proceedings. The PAC attributed the losses to factors such as a risky omnichannel strategy and the impacts of the COVID-19 pandemic. While acknowledging Khazanah’s rigorous internal processes, PAC recommended enhancing standard operating procedures (SOPs).
Khazanah Nasional accepted the PAC’s findings, reiterating its commitment to balancing financial discipline with nation-building objectives,
guided by strong governance. Dr. Afzanizam underlined the importance of clear exit strategies and governance, suggesting that Khazanah should ensure startups have scalable business models and sustainable revenue streams.
Dr. Razman proposed that Khazanah should concentrate on sectors like agri-food, which require greater focus among tech-savvy entrepreneurs. He cited Khazanah’s successful investment in Farm Fresh Bhd, which generated wealth and improved local farmers’ livelihoods. Dr. Razman advocated for investments in sectors with higher economic multipliers, particularly in rural areas, to foster balanced economic development.
He also suggested that Khazanah Nasional align its investments with Malaysia’s national priorities, such as green energy, digital economy, and healthcare, while maintaining financial sustainability through disciplined risk management and global partnerships. Dr. Razman emphasized the importance of catalyzing local ecosystems by focusing on private capital and nurturing talent, ulti
mately building regional champions.