Thinking about expanding into Pacific Asia? Then Jiro Suzuki, CEO of Malaysian Debt Ventures, would like you to consider Malaysia. To sweeten the deal, the Wharton grad is making his rounds in the US with $420 million in hand, itching to dole it out to biotechs in the form of low-interest debt financing.
To qualify for the fixed-rate, no-tangible-collateral-required loans, you’ll need to incorporate in Malaysia (“But it doesn’t matter if the company is 100 percent foreign-owned,” assures Suzuki), have at least RM100,000 — about $26,000 — in direct capital investment in the country, and employ at least five full-time native employees.
Suzuki conceived of the fund, fully owned by the Malaysian government, as an effort to exploit the current scarcity of funding in enticing foreign companies to do business in Malaysia. These days, equity funding often means giving up big chunks of your company — if you can get it at all. And bank loan interest rates for high-risk startups can often approach usury.
Banks also usually require “hard” collateral such as real estate or even cash deposits, but Malaysian Debt Ventures will offer loans on “soft” collateral such as a contract and IP rights.
Malaysia is also collaborating with MIT to set up a biotech zone called BioValley near the new Kuala Lumpur International Airport. “The focus is on the development of molecular biology, genomics, pharmaceutical and herbal products, as well as agribiotech,” says Suzuki. To lure foreign companies, the government will offer grants and incentives such as a tax exemption for up to 10 years.
Setting up shop in Malaysia has several advantages over more popular Asian locations like Japan and Singapore, Suzuki says. For one, it’s cheaper. In addition, the country’s tropical forests are ripe for bio-prospecting, as well as a greater ethnic diversity for clinical studies.
— Aaron J. Sender