Ficus SEA Fund
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Background of the fund and summary of key term
Ficus Capital is the world's first ESG-i driven Venture Capital Management Company. It was founded in 2018 by a group of banking, investment, technology and entrepreneurship. Ficus Capital is a registered Venture Capital Management Company with Securities Commission Malaysia since 2018. With its flagship RM60 million fund, Ficus SEA, Ficus Capital invests in sustainable and dynamic startups that bring impact to the environment and society. Ficus focuses on 3 main concepts: i) Shariah principles, ii) sustainable growth and iii) Environmental, Social and Governance (ESG). Subsequently, Ficus Capital advocates its investee companies to attain a Quadruple Bottom Line (QBL) which focuses on People, Planet, Profit, and Principle.
The Ficus SEA fund is backed by Malaysia Venture Capital Management Berhad (MAVCAP) as the anchor investor, with a 1:1 investment commitment matching ratio with other investors. The fund’s mandate is to invest in Shariah-compliant technology startups in the Southeast Asia region. The fund focuses on startups that are at Seed to Series B fundraising rounds. Ficus Capital has appointed Amanie Advisors Sdn Bhd and Prof Dr. Azman Mohd Noor as its Shariah advisors.
- Fund tenure: 7 years
- Investment period: The first 4 years of the Fund
- Divestment period: Year 3 upon the successful investment of the committed capital
Ficus Capital team comprises experienced individuals who come with diverse skill sets, regional expertise and collectively have over 70 years of experience. Nor’Azamin Salleh, brings more than 25 years of experience setting up and managing funds across the Southeast Asia region while Rina Neoh, a computer scientist by training, has been investing in early-stage and growth startups across Asia for more than 20 years. Abdullah Hidayat provides Islamic financial structuring capabilities and strategy with his 17 years of experience working in various financial institutions in the Southeast Asia and Middle East regions. The synergistic combination among the partners has resulted in Ficus Capital having a unique sustainable winning formula in growing startups from Seed to Iater stages of the startups’ growth journey.
Ficus SEA fund is a RM60 million early-stage VC fund that focuses on investing in technology sectors across the Southeast Asia region. The three main axioms of the Ficus SEA fund investment are (i) The rise of Southeast Asia’s economy; (ii) leveraging the scalability of technology; (iii) supporting companies with strong growth prospects; and (iv) Shariah Compliant Investment
i) The rise of Southeast Asia’s economy
The Southeast Asia economy is anticipated to become the fourth largest economy globally by 2030, driven by strong fundamentals such as favourable demographics, rising consumption and increasing foreign investment.
Southeast Asia is home to 600 million total population, with a median age of 32 and a rising middle class. In 2022, 350 million individuals were anticipated to join the middle class with USD$300 billion in disposable income. Meanwhile, Boston Consulting Group predicts that by 2030, the proportion of the middle class will increase by 5% annually. It is driven by improved access to the rapidly expanding digital economy, with 460 million internet users and USD$194 billion of gross merchandise value transacted in Southeast Asia’s digital economy in 2022.
The e-Conomy Southeast Asia report 2022 finds that in comparison to other regions, Southeast Asia is relatively less affected by macroeconomic headwinds, with real GDP growing at a steady rate and inflation being modest. Technology investments in the region maintained their momentum following a record high in 2021, with early-stage investments growing while late-stage investments see a downward trend due to dim IPO prospects. Early-stage investment ticket sizes have surged by 40-60%, giving investors reason to be confident about the region’s long-term prospects in the private market because Southeast Asia is comparatively protected from macro challenges.
ii) Leveraging the scalability of the technology
The global technology sector is estimated to be worth USD$5.2 trillion and is a fundamental component in any industry globally. This sector has particularly experienced tremendous growth in the post-pandemic environment, presenting a compelling case for technology investments.
Apart from the growth of the technology sector, investments in technology appeal to investors due to its scalability compared to traditional sectors, resulting in higher agility and Return on Investment. Despite the potentially high cost of development, once the technology is developed, it can be replicated and applied in a variety of use cases at a nominal cost, hence increasing revenue while incurring minimal additional costs.
Ficus SEA fund invests in the technology sector with a sector-agnostic approach. Preference might be given to several sectors, namely Greentech, Logistics, Edutech, Fintech, Ecommerce, Healthtech, Big Data Analytics, and Cloud Services, to leverage Ficus Capital partners’ expertise in these sectors.
iii) Supporting companies with strong growth prospects
Ficus SEA fund invests in early-stage technology startups with high and sustainable growth potential. The core set of criteria that it looks for in a potential investment are:
Strong Founding Team
- Scalable Business Model
- Well-established Go-To-Market Strategies
- Large Total Addressable Market
iv) Key Components of Shariah Compliant Venture Capital
There are several other key principles that must be followed in a Shariah-compliant venture capital transaction. For example, the venture must be involved in a permissible (halal) business, such as manufacturing, services or trade and must not involve in any haram activities such as gambling, alcohol and tobacco.
Ficus Capital uses the two-tier quantitative approach based on business activity benchmarks and financial ratio benchmarks, in determining the Shariah status of the listed securities. The securities will be classified as Shariah-compliant if their business activities and financial ratios are below benchmarks. Business activities that are considered non-compliant with Shariah principles, such as conventional banking and lending, gambling, and liquor and pork-related activities, are subject to a 5% benchmark, meaning that their contribution to the company's revenue or profit before taxation must be less than 5%. Other activities, such as share trading and stockbroking, are subject to a 20% benchmark. For the financial ratio benchmarks, Ficus Capital takes into account cash over total assets and debt over total assets, with each ratio being intended to measure riba and riba-based elements within a company's statements of financial position, each ratio must be less than 33%.
Ficus Capital has onboarded global Shariah experts, Amanie Advisors and Prof Dr. Azman Mohd Noor as Ficus SEA Fund Shariah Advisors. This is to ensure Ficus SEA Fund investment activities are compliant with shariah principles.
Deal Sourcing activity
Since 2021, Ficus has screened over 300 startups across SEA. The breakdown is as follows:
Ficus Capital conducts weekly pitching sessions and potential investment opportunities are sourced via two methods:
1. Direct Deal Sourcing
- Outbound sourcing by Investment Team
- Referral via Ficus Capital partners’ network
2. Partnership Network
- Asia CEO Community
A prestigious club in Asia specially catered for entrepreneurs and CEOs, dedicated to improving the profitability and quality of their enterprises through shared insights and experience.
- Malaysia Digital Economy Corporation (MDEC)
MDEC is an agency under the Ministry of Communications and Digital, leading the digital transformation of the economy for the last 26 years.
- Innohub by University Putra Malaysia (UPM)
Innohub is UPM’s first innovation lab targeted at nurturing Technopreneurs who work on translating technologies and innovations into market viable products by developing the best go-to-market plan from market validation exercises.
- Startup Community Bandung
A group of Bandung-based founders of Tech-startups, ecosystem players and stakeholders with proven track records and impact on the world
- Sunway iLabs
Sunway iLabs is the innovation arm of Sunway University and Sunway Group. Ficus Capital is currently partnering as a Venture Capital Partner for 2023 Sunway iLabs LaunchX Startups Accelerator Program
Helios Orion is San Francisco Bay Area-based execution-focused corporate strategy advisory firm that partners with innovative healthcare companies in key global markets to assist in their growth.
- National Technology & Innovation Sandbox (NTIS)
An initiative by the Malaysian government to fast-track the commercialization of products and solutions. It offers funding, regulatory and technical support to researchers, innovators, and entrepreneurs.
- International Technology Transfer Network (ITTN)
ITTN is a service organization committed to promoting International Technology Transfer and International Innovation Corporation. It carries out work in association with technology transfer and innovation service organizations both at the domestic and global events.
Ficus Capital’s investment process is segmented into 4 phases to ensure a thorough evaluation of potential investment opportunities.
Phase 1 : Deal Screening
Weekly pitching sessions are held between the analyst team and potential startups as the first introduction to the startup’s business. 3 to 5 startups are shortlisted monthly to proceed and pitch to Ficus Capital partners in a ‘Ficus Friday’ session, where the partners will determine if the startup should proceed to further phases for evaluation.
Phase 2 : Investment Decision
Startups that make it through Ficus Friday will proceed to discovery sessions. This is mainly for the Ficus Capital team to engage further and dive deeper into the selected startups. Ficus Capital conducts 3 main discovery sessions in preparation of the Investment Note for the Investment Committee (IC) meeting:
1. Deep Dive Session
A deep dive is conducted for a thorough evaluation of the startup’s business model and technological capabilities.
2. Financial Review Session
A financial review is conducted to analyse the startup’s financial performance and projections.
3. Expert Review Session
A panel of industry experts will be invited to validate the technology and potential of the selected startup, as well as provide insights and advice.
Throughout this phase, the selected startup is simultaneously assessed on its intellectual property and ESG-i compliance. Once the Investment Note is complete, it is presented to the IC for approval.
Phase 3 : Due Diligence
Due diligence is conducted on the legal, financial and team aspects of the startup that receives IC approval.
Phase 4 : Fund Deployment
Once due diligence is completed with no adverse findings, the investment agreements are prepared between Ficus Capital and the startup. This phase entails negotiation involving Ficus Capital, the startup and its existing investors to ensure that the terms of investment are in accordance with existing agreements.
Once the agreement is agreed upon by all parties and the startup has satisfied the conditions precedent, the investment amount will be disbursed.
Ficus Value Creation Framework
In addition to providing funding, Ficus Capital is committed to working closely with our portfolio startups to provide value-added activities and assistance. The Ficus Value Creation Framework is designed to help these startups achieve their targets and objectives through a collaborative effort. This framework consists of 3 phases - onboarding, facilitation, and monitoring.
After receiving the investment, the startup is integrated into Ficus Capital’s portfolio and an assessment is conducted to identify the gaps that Ficus Capital can facilitate as investors.
Based on the assessment during the onboarding phase, Ficus Capital will determine the course of action to provide the required support.
The progress of portfolio startups is monitored based on the balanced scorecard method. Updates will be obtained on a monthly, quarterly and annual basis.
Ficus Capital Partners has a total of individual track record of 11 exits, generating return multiples of RM 83.77 mil enable us to identify exit opportunities for our investee portfolios via the following:
1. Trade Sale
The sale of the portfolio startups to another company in the same or related industry.
2. Mergers and Acquisitions (M&A)
The ownership of the portfolio startups is acquired by or consolidated with another company.
3. Management Buyout (MBO)
The management of the portfolio startups acquires a majority or all of the company.
4. Initial Public Offering (IPO)
The sale of the stocks of the portfolio startups to the general public.
Ficus SEA Fund Portfolio Construction
- 40% of assets under management (AUM)
- Ticket size of RM500,000 to RM1,000,000
- 40% of AUM
- The ticket size of RM1,000,000 to RM5,000,000
- 20% of AUM
- The ticket size of RM5,000,000 to RM10,000,000
- Follow-on investments in at least 25% of startups invested during seed and pre-series A stage
- Follow-on investments in at least 50% of startups invested during Series A and B stages
Current portfolio highlights and performance of the fund
Ficus SEA fund's first investments are towards Greentech and AR. The fund had invested RM2 million in Eclimo, a Malaysian-designed and owned electric vehicle company, and a USD$400,000 investment in Assemblr, an Indonesian Augmented Reality (AR) startup that helps users create AR content via its web-based platform.
There is a global uptrend in the EV industry, with Asia Pacific expected to lead the growth and become the largest contributor in industry revenue. Eclimo’s focus on electric two-wheelers (E2W) is advantageous as the region is home to the largest E2W market, with household ownership topping 85% in several ASEAN countries.
Eclimo holds patents for its non-spot welding battery pack technology and direct-drive electric motor, which have been successfully commercialised. Its non-spot welding technique allows the battery pack to be individually dismantled and cells with diminished performance can be reused for less demanding purposes, such as a mini power generator, enabling the battery pack to have a prolonged life and new use cases.
Eclimo plans to expand its custom e-motorcycle fleet to include food vendors in the Southeast Asia region in the coming years. Among the company’s growing customer base includes brands such as Dome Cafe, GrabFood, Huckleberry Food & Fare, DHL, and Pos Malaysia Bhd. Eclimo is also a partner of Gentari Sdn Bhd, an independent entity owned by Petronas.
Assemblr is an intuitive single-platform tool that can provide users with engaging augmented reality and virtual reality content, making it accessible to everyone to create immersive real-life virtual experiences. Assemblr currently has more than 2 million projects created globally. Assemblr is an alumnus of various renowned international accelerators, including Techstars Hub 71, Facebook Accelerator and Plug And Play. It has also been featured as Apple App Store’s App of the Day in more than 100 countries. This marks Ficus Capital's first investment outside of Malaysia.
There's a lot of potential in the augmented reality market. The emergence of this technology in various fields such as gaming, advertising, and entertainment is undeniable. The team believes that the demand for AR will continue to grow as the world prepares for the emergence of the metaverse. Assemblr offers a unique solution to this market by providing an intuitive single-platform tool that makes it easy for users to create engaging augmented reality and virtual reality content. The platform is designed to be accessible to everyone, allowing anyone to create immersive real-life virtual experiences.
Eclimo website: https://www.eclimo.com
Assemblr website: https://www.assemblrworld.com
Terms for the potential angel and sophisticated investors;
- The investments and services offered by Ficus Capital may not be suitable for all investors. Please be informed that only Angel Investors and Sophisticated Investors are eligible to invest.
- The type of share to be subscribed is an Islamic Redeemable Preference Shares. As all shares are ranked pari passu with each other there shall be no preference granted to subscribers.
- No shares will be allotted or issued based on this document after six months from the closing of the offer period.
- This issue, offer or invitation for the offering is a proposal not requiring authorisation of the Securities Commission under section 212(8) of the CMSA 2007.
- This document has not been reviewed by the Securities Commission Malaysia. The Securities Commission does not recommend nor assume responsibility for any information including any statement, opinion or report disclosed in relation to this fundraising exercise and makes no representation as to its accuracy or completeness. The Securities Commission expressly disclaims any liability whatsoever for any loss however arising from or in reliance upon the whole or any part of the information disclosed.
- Ficus Capital will not invest more than 25% of the Total Capital Commitment in any one Investee Entity; incur any debt in making investments; invest in activities which are not Shariah-compliant activities as guided by the Shariah Advisor in accordance with the prevailing accepted Shariah principles; invest in listed securities; assume day-to-day operations of any startup; invest in startup that would cause Ficus Capital to be exposed with unlimited liability; invest in hedge funds, derivatives, currencies and commodities; and property and construction companies.
- All content on this site is for informational purposes of a general nature only, and does not address any circumstances of any particular individual or entity. Do not construe any such information or material as legal, tax, investment, financial, professional or any other advice.
- The Investor alone assumes the sole responsibility of evaluating all merits and risks that are or may be associated with any use of any information or material on the site or coming to any conclusion based on the information and content found on the site. In exchange for using the site, The Investor agrees not to hold Ficus Capital, its affiliates or any third-party service provider(s) liable for any possible claim for damages arising from any decisions The Investor may or had made based on the information or content made available on the site. In any event, Ficus Capital and/or its employees, advisors and representatives are not liable for any loss or damage whatsoever arising or incurred from any use or reliance of this site, its contents or otherwise arising in connection with.
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- pitchIN and its officers and staff may also be investing in this campaign
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