Yeo said Cradle Fund will focus on giving grants and coaching while Malaysia Venture Capital Management (Mavcap) will be geared towards a fund of funds (FOF) concept, following a rationalisation exercise headed by a task force set up in January.

She said Malaysia Debt Ventures (MDV) will continue to give out loans with a focus on new technologies and technology-driven industries.

“We realise that the government is actually not good at picking winners to invest in. Whenever government agencies pick the winner to do the venture capitals (VC), we have a return of less than one, which means the government loses money.

“But whenever we do a fund of funds model where private VCs are to invest together with the government, we get a return that is more than one.

“So it is actually a no-brainer for the government to go into this fund of funds model,” she said at an event here today.

Yeo added that the Cabinet agreed that the fund of funds model would be viable for all VC agencies and not just those under her ministry.

Sivapalan Vivekarajah, the chairman of the ministry’s task force for technopreneurs funding, said the goal of the rationalisation exercise was to grow entrepreneurship in the sector and ensure a stronger funding ecosystem.

Sivapalan told FMT that before this, the funds were not very streamlined, with overlaps between the agencies.

“This will consolidate funds, make them more focused and make sure there are no overlaps, and that the entire ecosystem is properly looked after,” he said.