January 22, 2016:
Malaysia’s early-stage technology startup influencer Cradle Fund Sdn Bhd has forged a strategic partnership with VLT Labs, a startup studio that enables founders to build their business.
The partnership aims to enhance the Cradle Fund’s grant-provision initiative, Cradle Investment Programme (CIP).
VLT Labs will be the service provider for the business and products design and development for startups that get Cradle’s CIP grants.
Cradle Fund investment vice president Xelia Tong said, VLT Labs’ expertise in helping early-stage startups materialise their ideas will better push the grant recipients towards commercialisation.
“When we fund these ideas, we provide the funding, but we don’t come with the technical know-how; we need strong partners like VLT to come in for that,” she told a press briefing.
“We may sometimes take a long time to understand what the startups want to do, and that understanding is very important for us,” she added.
She noted that even those applicants who did not get the grant initially could go to VLT Labs who can potentially understand their ideas and requirements better, and then build a strong MVP (minimum viable product) that could win them a grant under the CIP programme.
On an average, Tong said, about 80 startups walk through Cradle’s door each month to seek funding.
Cradle will channel startups that need help in forming their MVP or team to VLT Labs, and VLT Labs will help startups looking for grant funding to Cradle.
Cradle chief executive officer Nazrin Hassan commented that the partnership will provide a more effective approach in building and helping entrepreneurs make it in the market.
“There is assurance that the entrepreneurs will get the best of service in both quality and turnaround time while Cradle on the other hand, gets to see more of successfully completed and commercialised ideas from the companies that we invest in,” he said.
Founded in 2012, VLT Labs has built over 40 startups including Hello Roaming, an online shop for travelers to purchase local SIM cards of their travel destinations, and virtual assistant service Supahands designed to help busy individuals and businesses get their tasks done.
Director co-founder and director of design and user experience Izwan Ismail said, partnering with Cradle and leveraging their platform will enable VLT Labs to better align its efforts in propelling the Malaysian startup ecosystem further.
“Having learnt from every startup that we have helped build, we considered that we could share our experience with Cradle entrepreneurs in a more structured and regular manner and possibly partner with a few of them to launch their startups,” he said.
While VLT Labs does invest in some startups it assists, director Andrew Tan emphasised that the firm’s value-add is in providing design and development services to the startups, such as realising their product and forming a founding team.
“In some cases, we only charge a service fee. We do invest in some of the startups, and we do take a stake, but there is no hard and fast rule for this,” he said.
VLT Labs prefers to pick a stake in the startups it helps build but is clear that it does not function as a capital-provider primarily.
“Our value-add is our services; some (venture firms) are better at capital provision, but we are better at services we can provide to the startups. So when startups come to us for capital, we recommend they look for other players who are more equipped in that area,” he explained.
VLT Labs does not manage funds, and investments into its startups are primarily angel investments from the directors.