The Finance Asia magazine published an article that may turn the Malaysian startup world upside down, telling why a startup like Grab made it big in Singapore instead of Kuala Lumpur.
Grab, which started as My Teksi in Malaysia rebranded itself into Grab Taxi after moving to Singapore, leaving Malaysia behind certainly due to regulatory issues on raising funds from international venture capital.
The magazine quoted Chua Kee Lock, group president and CEO of Vertex who told the online publication how the company persuaded Grab to make the move and explained why he expects more hot start-ups from the region to make the same move.
He said the advantages of Singapore is that startups get government subsidies and tax breaks, but more importantly for start-ups and early-stage investors like Vertex is the well-developed ecosystem for start-up funding that helps attract international financiers and bring higher valuations for public offerings.
And using the facilities and the reputation of Singapore as a well-developed ecosystem for start-up funding that helps attract international financiers and bring higher valuations for public offerings, made Grab what it is today.
Chua said the above example were of greater support to startups than the usual government subsidies and tax breaks they get in Singapore.
Though Malaysian Venture Capitalists are more prone to close deals than their Singapore counterparts, Singapore has more billion dollar success stories to inspire the budding entrepreneurs.
Singapore has Garena, Lazada and Razer as billion dollar startups, while Malaysia has only one to show and it is the company that has flown out of the coo coo’s nest, that is Grab.
Asia Finance said while both Malaysia and Singapore has spent a lot of effort in encouraging innovation and entrepreneurship, Singapore has managed to create a stronger startup eco-system.
But it warned that Malaysia should be written off since its biggest weapon remains cheaper labour than Singapore’s that may turn the tide in the long run.
However, the question remains whether the Malaysian Digital Free Trade Zone being built in collaboration with Alibaba could help turn the tide for the Muslim majority nation?
Whispers are the Alibaba hub, as it is popularly called, may simply kill entrepreneurship since the latter has the reputation of eating up its competitors!