Malaysia dreams of start-up paradise but local talents head to Singapore over poor official support

They bootstrapped their way through, helped by a one-off contract to convert parts of a training module into a game format for staff of a local shipping firm, but Lim said it was not an experience she wanted to repeat.

Young Malaysian entrepreneurs say capital is limited at home, and available investment typically goes to well-established firms that have progressed beyond start-up status.

Lim said her team would try their luck in Singapore to fund their latest project called Emobuddy, an app-based programme to boost the mental health of children.

Singapore remains one of the region’s top destinations for start-ups and venture capitalists seeking to discover the next unicorn or a start-up valued at over US$1 billion.

The city state has hosted 18 unicorns over the past decade, with a mature start-up ecosystem valued at US$128 billion. It was ranked 8th globally in a 2023 report by Startup Genome, a research firm that analyses start-up ecosystems. Malaysia has produced one unicorn so far, after online car trading platform Carsome’s valuation hit US$1.3 billion in 2021.

Start-up Genome ranked Kuala Lumpur 20th among emerging ecosystems with robust early-stage funding activities.

But Malaysia’s capital city still trails behind Jakarta, which has produced seven unicorns in the past 10 years and faces a stiff challenge from Manila, where firms have similar access like Kuala Lumpur to a young and educated workforce and strong government backing.

In April, Malaysia unveiled a grand plan to break into the world’s top-20 start-up hubs by 2030 by developing an ecosystem to nurture talent and start-ups from Malaysia and elsewhere in Southeast Asia with ready access to venture capitalists.

Kuala Lumpur currently ranks outside the top 100