(Jan 31): The venture capital sector in Malaysia has enjoyed a decade of global prominence amid record levels of fundraising. This has been particularly true for Southeast Asian start-ups raising funds in the early stage. However, industry players believe this has caused valuations to be inflated in recent times.
The sector continues to attract significant inflows locally and regionally. However, the recent failures of several multibillion-dollar unicorns may have an impact on start-up valuations going forward.
Industry players believe that the push by some venture capitalists (VCs) for excessive valuations in investee companies will not be sustainable going forward because with every funding round, the start-ups become more hard-pressed to deliver increasingly unrealistic returns to subsequent investors.