Decoding Investor Interest: Key Insights for Startups in Malaysia’s Thriving Market

Written by German Accelerator

Malaysia’s allure extends to the remarkable diversity of industries and sectors that flourish within its borders. From the bustling business hubs of Kuala Lumpur and Penang to the thriving manufacturing centers in Johor, Malaysia offers a wide spectrum of opportunities. Its diverse sectors encompass everything from manufacturing and technology to agriculture and tourism.

As a startup or founder, you are probably already aware of the top must-haves when it comes to getting investors to sign off on that vital funding round – knowing your product well, proving your products’ scalability and competitive edge, stellar communication skills, tenacity, and, of course, passion.

But what exactly makes you stand out from the many hopefuls in the fundraising race, and specifically in Malaysia? We spoke to two investors in Malaysia about their views, tips and insights, and how German and international startups can get a leg up when expanding to Malaysia.

Sharon Lou

Sharon Lou

Venture Partner at Indelible Ventures & Director at Founder Institute


Aaron Sarma

Co-Founder & General Partner of ScaleUp Malaysia

Tip 1: Understand the Malaysian Business Landscape

Every country has its distinct dynamics, and, in essence, localization is one key to success. Ditch the “one-size-fits-all” mindset, because the way business is done in different countries and regions naturally vary. For example, in Malaysia, negotiations, building business relationships, and achieving consensus within organizations may take time. Patience is key, and you might find it helpful not to chase for immediate responses. Furthermore, compared to Western countries, business communications in Malaysia tend to be more indirect, often relying on subtle hints rather than direct and explicit statements. Above all, you’ll have to invest in market research, understand local demands, and be willing to adapt to the Malaysian market.

While that may be a no-brainer for most astute startups, how can one speed up their localization process?

Reach out to the local startup ecosystems, Sharon says. These are good places to start with for any entrepreneur hopeful to learn from people who have been there and done that, and also connect with investors.

“Once they mingle in the group and are part of it, they’ll naturally understand the ecosystem better in a much shorter period of time,” she explains. All the desk bound research in the world simply does not compare to the insights and experience of a local.

Here’s where leveraging the resources and networks provided by organizations such as German Accelerator can be a game-changer in your localization journey. When you’re on board, you’ll have access to up-to-date market insights, local experts, industry networks, and more. These resources can serve as catalysts in helping you navigate the complexities of the Malaysian market and thrive.


“Once they mingle in the group and are part of it, they’ll naturally understand the ecosystem better in a much shorter period of time. 
Sharon Lou | Venture Partner at Indelible Ventures & Director at Founder Institute

Tip 2: Align with Social Etiquette

Business dynamics aside, knowing social nuances in Malaysia and Asia, in general, could be key to building rapport with potential investors. Although Malaysia has experienced significant globalization in recent years, understanding and respecting social nuances remain essential for establishing rapport with potential investors and fostering successful relationships in both Malaysia and across Asia. Here are some important points to note.

1. Malaysia is a predominantly Muslim-majority country, so it’s important to show respect for Islamic traditions in your interactions.
This includes considerations such as scheduling meetings that accommodate Friday prayers (which are held in the afternoon), being courteous when interacting with Malay female executives, dressing appropriately, and being mindful of dietary restrictions, such as avoiding alcohol or pork during entertaining.

2. Recognize the significance of “face”.
The concept of “face” in daily interactions is important in Asia in general and in Malaysia, amongst the Chinese, Malay, and Indian communities. Work on promoting “face” and harmony when engaging with people – this means preserving one’s image and avoiding behaviors or situations that may cause embarrassment, shame, or loss of respect. Read more about the concept of “face” in this article.

3. Speak with tact.
While in some Western cultures, credit is given to those who show signs of “assertiveness”, this can be considered rude or offensive in the Asian and Malaysian context, which can negatively impact fundraising prospects.

Read more about business etiquette in Malaysia in this article by HSBC.

If you’re looking to expand to Malaysia, try to have someone familiar with the cultural nuances on board, consider having an external consultant, or simply, as Sharon advises, mingle and learn as you go.

Tip 3: Align with Malaysia’s National Objectives and Business Needs

Investors frequently favor startups that are in harmony with and can support the overarching national agenda. Aaron points out that many investors have funding from Limited Partners (LPs) associated with the government. Therefore, incorporating elements that contribute to the nation’s development can greatly benefit startups aiming to expand into Malaysia. A significant part of this is to demonstrate a genuine commitment to building a presence in Malaysia.

On her observations on what’s thriving in Malaysia, Sharon says, “Malaysia is generally an enterprising country, so there are a lot of companies that need solutions to make their processes more efficient.”

For example, Sharon mentions that Indelible Venture places a particular emphasis on B2B SaaS products and solutions. They support startups that cater to a wide range of companies, from small and medium-sized enterprises (SMEs) to large corporations. In recent years, businesses specializing in B2B SaaS within Indelible Ventures’ portfolio have demonstrated returns approximately four times their initial investment.

“Malaysia is also looking into areas such as environmental, social and corporate governance, as well as sustainability, tech, food security, and fintech, including Islamic fintech,” she adds.

For ScaleUp Malaysia, Aaron shares that they are focused on pre-Series A companies and open to various sectors. Food security, sustainability, and agriculture are some key focus areas that have been getting their attention lately.

“Malaysia’s got a really huge background in agriculture, and at Scaleup, we think that there’s a huge opportunity really in helping agriculture companies digitize,” he elaborates.

The clean energy sector, he adds, is also an area that the Malaysian government is supportive of.

Tip 4: It’s More than Just Your Products and Services – It’s about You, and Your Team’s Dynamics

Investors don’t just back businesses; they back the people steering the ship. While investors are interested in how your product or service can help them make money, they’re also placing their bets on the business owner. Aaron puts it this way – it’s far more important to have a strong founder than a strong product.

He uses the ever-evolving business environment and market as an example. A market shift, the entry of a formidable competitor, or profound disruptions like the COVID-19 pandemic – these events can transform the entire landscape. Products evolve rapidly in response to such challenges. Strong entrepreneurs, those armed with resilience and adaptability, are adept at steering their businesses to align with these shifting dynamics.

Additionally, your team plays a pivotal role in attracting investment. Beyond technical expertise, highlight the soft skills of your team members – traits such as adaptability, communication prowess, and cultural acumen.

“In every team, there’s always a go-getter character. That’s great. But you also need somebody who can make sure the house doesn’t catch fire, and is able to make sure that the wheels are still spinning. 
Aaron Sarma | Co-Founder & General Partner of ScaleUp Malaysia

The team needs to be committed and “in it for the long haul” as the investor provides the startup with more than just financial resources; they also offer their networks and skills.

Aaron also highlights the importance of soft skills, which span traits such as integrity, understanding how to manage meetings effectively, and striking that delicate balance between being opinionated and crossing into discourtesy, just to name a few.

“I think: Can I spend time with this guy for 10 years, or will I hate him?” he quips.

Sharon agrees, citing particular qualities that the team at Indelible Ventures prioritizes: “One of the principles we look at is the people, product, and process – we focus on how this person’s personality is, how the team is today, and team dynamics, how passionate they are about the product.”

“It’s a common thing venture capitalists look out for – we understand that establishing a startup is difficult, and we really need people who are dedicated and passionate about it.”

Tip 5: Be Prepared for the Tough Questions

In the world of startup investment, you’ll face a barrage of tough questions from potential investors. How well you respond to these inquiries can make or break your pitch. We sussed out the top three questions Sharon and Aaron often find themselves asking.

Sharon Lou

1. Do you really need the investment?


2. How will the investment actually help you get to your next level?


3. What is your exit plan?


Sharon Lou

Venture Partner at Indelible Ventures & Director at Founder Institute


1. Why is this the solution for the problem that you’ve told us?


2. Why you?


 3. Why now?



Aaron Sarma

Co-Founder & General Partner of ScaleUp Malaysia

What’s Ahead for the Malaysian Startup Landscape?

Today, Malaysia has established itself as a bastion of economic stability in Southeast Asia. With a strong and diversified economy, the nation has weathered global economic fluctuations and emerged as a beacon of resilience. Its consistent growth prospects are underscored by a burgeoning middle class and a government committed to fostering a conducive business environment.

“Southeast Asia is one of the booming regions in the world. Malaysia, being in a very strategic position in Southeast Asia, has many good qualities,” Sharon says.

For one, Malaysia serves as a gateway to the ASEAN region and has numerous trade agreements that facilitate business with neighboring countries. There has also been much effort by the Malaysian government to encourage foreign businesses through initiatives such as the recently revamped Malaysia Digital (formerly Multimedia Super Corridor) and the digital nomad pass.

Malaysia is a great place to begin your journey because it’s remarkably easy to acclimate to. Adjusting to life in Malaysia is also a smooth process. In fact, as shared by Sharon, about 30 to 40% of Indelible Ventures’ portfolio consists of foreign expatriates who find it relatively straightforward to embrace Malaysian culture, given the convenient accessibility to everything they need.

“I think Germans will love Malaysia. It’s a great place to have a good mixture of business opportunities and lifestyle, and you can build a fast-moving business here,” says Aaron.

“I would say for any foreign entrepreneur looking for a base in Southeast Asia, there’s no better place than Malaysia”, he adds.


Spotlight on Malaysia


GDP growth3.3% (yoy in Q3 2023)1
Population34,420,430 (2023)2 as of Sunday, October 22, 2023
CapitalKuala Lumpur
Financial & economic hubsGreater Kuala Lumpur, George Town
National languageBahasa Malaysia
FTAs16 FTAs (7 bilateral FTAs and 9 regional FTAs)
FDIUS$15.11 billion (2022)3
Key industriesEdtech, Ecommerce, Foodtech, Agritech, Enterprise applications

1 Trading Economics.   2 Worldometer, assessed October 22, 2023.  3 Macrotrends

Interested in expanding your German startup into Malaysia? Check out the equity-free programs offered by German Accelerator and make your dreams of international expansion a reality.

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