INNOVATIVE STARTUPS' GROWTH HAMPERED BY INABILITY TO BID FOR GOVT TENDERS

By Fatin Umairah Abdul Hamid

KUALA LUMPUR, May 2 (Bernama) -- Startup founders are frustrated that their innovative ideas, which could help the government, are being held back because they cannot participate in bids for public projects.

Pandai Education Sdn Bhd co-founder and chief executive officer (CEO) Khairul Anwar Mohamad Zaki said that bidding for public tenders requires companies to maintain a high paid-up capital but unfortunately, local startups do not have a high paid-up capital as they usually start with little capital.

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"This is unfortunate because some government tenders have strict terms and conditions such as needing companies to be incorporated for more than a few years and having specific Ministry of Finance’s field codes,” he told Bernama.

According to the registration guidelines provided by the Ministry of Finance on the official e-Procurement website, the company registration field code serves as a reference to government agencies regarding the use of field codes for specific supplies and services per current financial procedures and regulations.

Each procurement must adhere to the principles of public accountability, transparent management, best value for benefits, open and fair competition, as well as equity and fairness.

Khairul Anwar stressed that startups should be given a broader scope of assistance and support, especially those which are not solely reliant on funding.

“These could be in the form of incentives as well as the easing of regulations, in addition to making it easier for more startups to gain access to funding,” he said in response to the just-concluded KL20 summit, which concluded with the KL20 Action Plan.

On April 22, Economy Minister Rafizi Ramli unveiled the KL20 Action Plan, outlining new initiatives to accelerate critical aspects of the startup ecosystem, including capital, talent and startup quality.

The initiative aims to position Malaysia as the preferred destination for early-stage and growth venture capital, to become a hub for world-class entrepreneurs and skilled talents, and to serve as the home for world-leading startups seeking to start, grow and scale.

Khairul Anwar emphasised that certain regulations might hold back startup growth, including incorporation, tax laws, labour legislation, environmental laws, securities laws, contract laws, and intellectual property laws, and called for these rules to be relaxed to help the sector grow, 

“A startup needs skilled people, support, and an environment that is easy to work in.

“We also need simpler rules because some areas where startups operate have too many restrictions. What we really need are policies that support startup ecosystems," he added.

Against such a backdrop, he emphasised that a ‘green lane’ could be established for local startups.

Meanwhile, PolicyStreet co-founder and group CEO Yen Ming Lee lauded the government's acknowledgement of the importance of nurturing the country's startup environment.

He also recognised the potential of the initiatives unveiled at the KL20 Summit, adding that PolicyStreet, an insurance technology company, believes that the implementation of these initiatives would foster a more favourable environment for investors.

“Given our unique position as a Khazanah-backed startup, we are open and willing to work closely with relevant entities and provide perspectives and insights to help enable the successful rollout of the initiatives. 

"Remaining true to our mission, PolicyStreet is committed to narrowing the protection gap (the difference between the insurance rate in ASEAN) and serving the underserved market segments, leveraging technology to push the boundaries of the insurance industry," he added. 

The protection gap refers to the disparity between the insurance penetration rate in ASEAN which currently stands at around 4.0 per cent of gross domestic product per capita and the global average of 7.0 per cent. 

For context, the Life Insurance Association Malaysia (LIAM) reports that only 54 per cent of Malaysians have any form of insurance coverage.

-- BERNAMA