This article first appeared in Digital Edge, The Edge Malaysia Weekly on July 14, 2025 - July 20, 2025

Malaysia’s start-up scene is gaining momentum. However, to stand out in a crowded field, start-ups must prioritise quality, maintain a clear focus and remain flexible in building their businesses, according to Sam Shafie and Kashminder Singh, co-founders of Watchtower and Friends (WTF).

Founded in 2015, WTF is a Kuala Lumpur-based tech accelerator that invests in early-stage technology start-ups. Initially focused on building start-ups internally, it has since pivoted to an accelerator model that supports external ventures.

Kashminder says one of the main challenges for start-ups is overcoming inertia and responding quickly to change. “The key for start-ups is to not get stuck in preparation mode and learn how to pivot and adapt as the markets evolve. If you don’t succeed in two years, you might as well give up because the world will move far ahead of you.”

That’s not to say the local landscape lacks resilient or sustainable companies. In fact, some of the best start-ups that are flexible and quick to pivot are Malaysian-owned, according to Kashminder and Sam.

“Cost wise, it is more affordable here and talent is also in abundance,” says Sam. “Malaysia is the best place to launch a start-up.”

However, he also points out the challenge of attracting and retaining talent, particularly when it comes to compensation and benefits. Competing with overseas markets remains difficult, as “others can easily outplay Malaysian start-ups”.

But with growing support from both public and private sectors, Kashminder sees a good chance for start-ups to level up, if they can execute, adapt and grow their ideas fast.

“I think as the support system grows, whoever is coming into the start-up ecosystem, please work with the players in the start-up ecosystem. If you try to do it on your own, your chances become slimmer,” he says.

Kashminder also believes that government-linked companies and agencies should collaborate with incubators and accelerators to build their initiatives. “In the past, there have been organisations that wanted to do a start-up programme, but the terms and conditions that they set would have killed the start-ups anyway. When you establish a start-up ecosystem, you have to keep things very flexible. If not, they [the start-ups] will not have that ability to create, innovate or pivot.”

In the early days, one of the biggest challenges for start-ups in Malaysia was funding, says Sam. Start-ups would join an accelerator programme or apply for grants to get some initial capital, but beyond that, the options were limited.

“Start-ups usually need multiple rounds of funding such as seed capital to build a prototype, followed by growth capital but access to Series A, B or C funding was scarce at that time,” he says.

Hence, these companies started to gravitate towards neighbouring countries like Singapore or Indonesia where there was more capital available. But Sam believes that the trend is changing now, thanks to local institutions such as Khazanah Research Institute that play a part in allocating funds for start-up investments and fostering more venture capital on home ground.

“Previously, VCs (venture capitalists) from places like Jakarta or Singapore would say, if you want our funding, you’ll need to also be based in Singapore. But now, many of them have set up offices in Malaysia. So today, there’s less reason for start-ups to move abroad. Many can stay and grow here,” says Sam.

Foreign start-ups should also be welcomed, says Sam, adding that they provide healthy competition for local start-ups that aim to scale beyond Malaysia.

“Yes, it may mean more competition for local funding, but it also raises the bar. In global major hubs of start-ups like Singapore, you always see that influx of foreign and local start-ups working together and competing with each other. Only then would you get the best out of the best,” he says.

Kashminder adds that the value of diversity is important too. Foreign start-ups are able to offer skills and knowledge to the local start-up ecosystem. By encouraging openness, he believes the industry will grow more organically as it will be driven by shared knowledge and collaboration.

“Let’s not forget that when a company succeeds, even if it’s a foreign company operating here, its success can create a ripple effect. It often leads to the emergence of supporting businesses and service providers,” he explains.

While trying to find a balance between nurturing local start-ups and opening the door to foreign ones is challenging, he believes the potential benefits are significant. Other start-ups will start to build around these larger companies because there is now demand and business opportunities.

Reflecting on their first five years as venture builders, Kashminder and Sam say they realised that start-ups thrive when founders are deeply committed and emotionally invested.

“We set up five companies, of which PitchIn was one, but the other four died off. The people we tasked with running those four companies lost interest, because they might have realised that they’re not really the founders, rather, employees. The only company that survived from the early days of venture building was PitchIn. And the reason it survived is because we were actually running it ourselves,” says Sam.

PitchIn started in 2012 as a reward-based crowdfunding platform, which then became Malaysia’s first recognised market operator under the Securities Commission Malaysia in 2015, enabling equity crowdfunding for local companies.

“We learnt that founders are important. Having founders who can work with us and are coachable is important. For us, the important thing is whether the founders are flexible and are able to pivot to another idea if their first one fails,” says Kashminder.

Citing MoneyMatch Sdn Bhd as an example, Kashminder says the founders had proposed the platform as a peer-to-peer foreign exchange. However, when that model did not gain traction, they turned their focus to remittance instead.

MoneyMatch holds a Class B remittance licence from Bank Negara Malaysia, authorising it to facilitate outbound money transfers from Malaysia. The company is also licensed to operate in other markets, including Australia and Brunei.

It offers low-cost digital remittance and foreign exchange services, enabling transfers to individuals and businesses in over 100 countries.

“Of course, not all start-ups we choose to invest in will survive. There could be people or businesses that don’t do well. However, if the founders come back to us again and are willing to pivot, we will still be willing to hear them out because they are good founders,” says Kashminder.

At the end of the day, he wants well-rounded and hands-on founders who have the grit, self-reliance and determination to get things moving before the company even grows.

“Start-ups usually consist of two or three founders who have to build a business with [virtually no resources or connections]. There will be sacrifices [such as having no salary] and having to take on multiple roles on their own at the start,” says Kashminder.

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