KUALA LUMPUR: Malaysia Debt Ventures Bhd (MDV) has entered into an investment agreement with Kapital DX Sdn Bhd (KLDX) to participate in KLDX’s initial exchange offering (IEO) platform.

It will establish the first venture debt fund to be listed on an IEO platform in Malaysia.

Under this agreement, MDV CEO Nizam Mohamed Nadzri said, MDV and KLDX will also cooperate in other areas, including fundraising for MDV-identified projects, joint investments in projects originating from the KLDX platform, development of fundraising products on the KLDX platform and provision of services such as due diligence and monitoring for fundraising activities on the KLDX platform.

“This collaboration allows MDV to explore new horizons in fundraising, providing MDV with expanded opportunities to grow our portfolio and continue our support for technology companies, particularly Green Economy companies, SMEs and startups,“ he said at a signing ceremony today.

According to MDV chairman Wong Chen, they intend to leverage on the platform to finance technology projects related to the National Energy Transition Roadmap, especially in renewable energy and energy efficiency.

“The IEO platform, bolstered by blockchain technology, introduces a new paradigm in fundraising as it offers a more efficient, cost-effective, and flexible form of fundraising. This can potentially contribute to reducing reliance on traditional financial institutions and government grants. The platform will also facilitate fundraising of venture capital and venture debt funds that will support development of tech startups in Malaysia and the region,” he said.

MDV was established by the government in 2002 with the objective of providing flexible and innovative financing facilities to develop the information and communications technology (ICT) sector that had been identified and prioritised as the catalyst for the nation’s growth.

KLDX founder & CEO Selvarany Rasiah said its IEO platform is using a new approach to asset ownership through digital tokens, which opens up fundraising and investment avenues, allowing digital tokens to represent an array of asset classes and providing an alternative to traditional markets.

“The platform aims to provide investors seeking diversified, high-growth investments, better access to the private market assets that are otherwise limited to institutional or high net worth investors,” she said.

Tan Sri Nik Norzrul Thani, chairman of KLDX, said the platform’s mission is to transform the fundraising landscape for young companies that often face difficulty in securing funding from traditional financing sources and who would benefit from alternative financing sources.

“For investors we bring financial inclusion by enabling access to private market assets which are typically higher yielding and largely inaccessible to them presently,” he added.

In March last year, the Securities Commission Malaysia (SC) registered two IEO operators, Kapital DX Sdn Bhd and Pitch Platforms Sdn Bhd, to promote innovation in the digital assets space.

According to the SC, the registered IEO operators will provide an alternative avenue for eligible companies to raise funds via the issuance of digital tokens in Malaysia.

An issuer may raise funds up to RM100 million from retail, sophisticated, as well as angel investors, subject to the investment limits provided in the SC’s Guidelines on Digital Assets.