We started the year with a funding talk by Sid Fong from NEXEA Ventures at our MyXaaS Innovation Centre in Cyberjaya, attracting over 60 start-up founders.

Sid Fong provided insights on how investors evaluate start-ups before deciding to invest. Citing Securities Commission Malaysia, he shared that at the end of 2022, RM5.37 billion VC funds were committed in Malaysia, with Growth Start-ups leading at 48%, followed by Early-Stage Start-ups at 37%, Start-ups at 5%, and Seed at 11%.

The valuation methods used by investors vary by stages as follow:

• Early Start-ups are evaluated based on Floor Valuation encompassing the risks versus opportunities, and market conditions such as Supply and Demand, Cost, etc.
• Growth Start-ups are evaluated based on Valuation Multipliers, with the extra variable of traction, shown by Gross Merchandise Value / Gross Transaction Value, Revenue, Gross Profit, etc.
• Mature Start-ups are evaluated based on Profit Multipliers, shown by its P/E Ratio etc, much like a mature company.

Investors who invest on Seeds face a higher risk but exponential profit returns. Investors who invest on Growth Start-ups, on the other hand, face a lower risk with lower profit returns. Hence, depending on the risk and return appetite, an investor may choose to come in at an earlier or later stage.

This is just a tip of an iceberg from what NEXEA shared. Join us in our next event. Our guests just need to take a Putrajaya line train to our Finexus Cyberjaya Utara MRT Station, and we will have our very own Finexus shuttle to send you to our MyXaaS Innovation Centre.