2026/69 “Malaysia Startup Ecosystem Roadmap (SUPER): Achievements and Prospects” By Tham Siew Yean

Facebook Page of the Malaysian Research Accelerator for Technology and Innovation (MRANTI). MRANTI fast-tracks the development of technological innovations from ideas to impact, serving as a connector, incubator, and catalyst.

*Tham Siew Yean is Visiting Senior Fellow with ISEAS – Yusof Ishak Institute, and Professor Emeritus, Universiti Kebangsaan Malaysia. The author would like to thank the following for their insightful comments: Cassey Lee, David Lam and Siwage Dharma Negara from ISEAS – Yusof Ishak Institute. All omissions and errors remain my own.

ISEAS Perspective 2026/69, 28 September 2026

Startups are pursued as catalysts for national progress. They drive economic growth through innovation, attract high-value investments, create new jobs, and push industries toward greater competitiveness.

The Malaysian government defines startups as “innovative ventures with scalable business models and high growth strategies, led by entrepreneurs who have successfully brought their ideas to commercialisation.”[2] Startups’ new or modified products/services, often technology-driven, can ‘disrupt’ or change an industry.

The Malaysian government launched the Startup Ecosystem Roadmap (SUPER) 2021-2030 to align and connect existing national policies that had been scattered across different ministries. These policies include the National Policy on Science, Technology and Innovation (DSTIN), the National Entrepreneurship Policy 2030, the National Fourth Industrial Revolution (4IR) Policy, Industry4WRD, the Malaysia Digital Economy Blueprint, the 10-10 Malaysian Science, Technology, Innovation and Economic (MySTIE) Framework,[2] and the Shared Prosperity Vision 2030.

Broader objectives in these documents include using startups to raise GDP contribution, generate high-value jobs, expand deep-tech investment, and improve social wellbeing.

Cradle Fund has emerged as the focal agency for startup development, overseeing grants, accelerators, ecosystem programmes, and the implementation of major aspects of SUPER. It improved early-stage startup funding by launching a consolidated single-window platform, MYStartup, in 2021. The platform then helps to connect founders, investors, ecosystem builders, accelerators, talent programmes, and government initiatives, thereby reducing institutional fragmentation.

This Perspective reviews SUPER’s aims and targets and seeks to ascertain how much progress has been made since its launch in 2021 and what outstanding challenges Malaysia’s start-up scene still faces.

SUPER is a 10-year national roadmap developed by the Ministry of Science, Technology and Innovation (MOSTI) to foster startup development. Its central vision is for Malaysia to be ranked among the top 20 global startup ecosystems by 2030 and to boast a mature, largely self-sustaining ecosystem of 5,000 startups that generates knowledge transfer and wealth creation.

SUPER was developed based on extensive feedback from 337 stakeholders (including 209 public respondents), 24 organisational meetings, and multiple questionnaires and roundtables. Once key challenges facing startup development in the country had been identified, five thematic drivers were articulated to support the roadmap, namely funding, talent, innovation, policies and regulations and market environment (Table 1).

The objective is to increase private-sector participation in startup funding, build foundational technical and entrepreneurial skills, turn deep tech innovation into marketable products, make the rules clearer for start-ups to follow, and open opportunities for local, regional and global connectedness. Unlike previous plans, this roadmap lists 16 interventions under the five themes, divided into short-term (ST) and long-term (LT), as shown in Table 1.

Table 1. Summary of SUPER’s Five themes and 16 interventions

SUPER has listed several numerical targets as key performance indicators for tracking performance for continuous improvements, although the basis for these numerical targets is not explained. Moreover, although the indicators are shown against the five themes, the rationale for choosing these indicators for the themes is also not explained in the roadmap. Regardless, the achievements of the numerical targets are still used as a basis for evaluating the development of startups in Malaysia. There are nine numerical targets in the document, with three due by 2025, while the other six by 2030 (Table 2).

Table 2. Targets in SUPER and achievements by August 2026

Notes: SUPER provided some initial numbers. The ones with endnotes indicate initial numbers provided by the author. Targets 8 and 9 are stated in SUPER for specific sub-indices but the most recent data can only confirm overall rankings

Source: SUPER and multiple sources as in endnotes

Of the nine indicators, three were due by 2025, while the rest are due by 2030. The first target for 2025 was the number of unicorns[12] (Table 2). According to Tracxn,[13] two unicorns instead of the aspired five by 2025 had been achieved. They are Carsome and Edotco (Table 2). The former is an integrated, app-based automotive e-commerce marketplace that digitises the traditional used car buying and selling process; it achieved unicorn status in 2021. The latter is a regional telecommunications infrastructure services provider that manages end-to-end solutions in the tower services sector, and also achieved unicorn status in 2021. Edotco is omitted from certain global unicorn databanks as it is a subsidiary of Axiata Group Berhad, which is a Government-Linked Company (GLC) rather than an independent, venture-backed startup.

Based on the registration on MyStartup, there are 5,013 active startups in Malaysia as of August 2026.[14] MOSTI announced that the goal of 5,000 was achieved by January 2026.[15] But, not all startups are registered with MyStartup, given that Tracxn reported over 29,442 startups in their databank, 2,320 (or 8%) of which are funded companies. Registration with MyStartup is voluntary, and information provided has to be verified before entering the databank. Although registration will provide registered startups access to activities, funding and network available through MyStartup, eligibility is not guaranteed. For example, MyStartup indicates that only 12% of registered startups from 2019 to 2024 secured funding. Therefore, 5,000 startups only indicate how many exist, not how many are thriving.

The second target of achieving a top-20 ranking for “Starting a Business” appears to have been met as Malaysia’s overall competitiveness improved from 22nd in 2022 to 15th in 2026. It is, however, not necessarily related to any of the interventions under SUPER; improving the competitiveness of Malaysia has been a key target of Malaysia Productivity Corporation (MPC) since 1991, when the organisation shifted its primary focus from basic training to national competitiveness, innovation, and international benchmarking. The third target, due by 2025, the Global Entrepreneurship Index, was phased out in 2019.

As for the six 2030 targets, none have been achieved yet, especially in view of the outstanding challenges that are outlined in the section below.

The shortfall in unicorns in Malaysia points to some deeper problems in the ecosystem.

When SUPER was formulated, funding was noted as a key challenge and is one of its five key themes. World Bank (2022) found early-stage financing (i.e., from the ideation stage of firms’ lifecycle to product development and commercialisation to revenue generation) to be lacking, leading to the use of personal sources of finance and retained earnings for financing start-ups at this stage. It was argued that investors had been risk-averse and preferred to avoid unknown companies with no established commercially viable products.

Consequently, the government stepped in to provide grants for various federal and state agencies, including Cradle, the Malaysia Digital Economy Corporation (MDEC), Malaysia Venture Capital Management Berhad (MAVCAP), and Digital Penang, to help fund early-stage startups.[16] To illustrate, in 2025, Cradle was allocated RM65 million to fund or facilitate startups.[17] Over time, early-stage funding grew from RM37.8 million (81 deals) in 2020 to RM45.8 million (137 deals) in 2024 (Charts 1 and 2).[18]

State-led funding remains important in the venture capital market (around 50% in 2024 and 2025), while the role of private funding is still underdeveloped. The Ministry of Finance (MOF) also intervened to create a matching fund programme, namely Dana Penjana Kapital, in 2020. This US$145 million (RM 600 million) programme was initiated to attract both local and foreign players to invest in the local private funds industry, and has to date successfully generated over US$290 million (RM1.2 billion) in committed capital. This capital is envisioned to be invested primarily in Malaysian or ASEAN investee companies that could yield tangible economic benefits to Malaysia.

Nonetheless, mid-stage and late-stage funding are still reported to be short (Charts 1 and 2), which forces successful start-ups from the early stage to seek funding from outside Malaysia; this risks their relocation out of the country.[19] Grab’s relocation to Singapore to fund its scaling ambitions is often cited as an example. Additional risks include a weakening of the ecosystem as role models of scaling up are not available locally, as well as disincentivising the emergence of late-stage venture funds.

Chart 1. Start-Up Funding by Stage, 2020-2024, RM million

Source: MyStartup Annual Report 2023/24

Chart 2. Start-Up Funding by Stage, 2020-2024, Number of Deals

Exiting an investment is another sticking point. Investors typically want to cash out through a stock market listing (an IPO) or by having the company bought out due to limited local acquirers.[20] But IPOs require years of proven profits, and Malaysia’s market for buying and selling companies is comparatively thin. In the year to August 2026, Malaysia recorded 14 company acquisitions and, in the year to July 2026, 20 IPOs, compared with 24 acquisitions and 27 IPOs across the whole of 2025.[21]

Still, the large number of unfunded startups suggests a funding problem; the government has however given assurances that this is not due to a shortage of capital in the country.[22] But accessing funds can be problematic, given that there is no clear information on this matter.[23] MyStartup lists ten agencies on its website for funding, with each institution having its own eligibility criteria.[24] Bureaucracy also makes it difficult to navigate each of these institutions.

However, funding is only part of the equation for a sustainable startup ecosystem; quality startups are needed for the system to flourish and this is tied to the basic need for robust R&D and innovation.

The second challenge is R&D and innovation; this is needed if startups are to survive intense market competition, adapt to shifting customer needs, and avoid stagnation. Constant innovation helps young companies secure a competitive edge, attract new investors, and scale into sustainable long-term businesses. However, R&D spending in Malaysia remains at around one percent of GDP, which is far short of the targeted 3.5% for 2030 (Table 1).

A 2026 government audit[25] added to the concern: by mid-2025, 34.1% of publicly funded research projects had been completed, 64.7% remained ongoing, and RM183.11 million in research grants across nearly 7,900 projects had not been returned or properly accounted for. The Auditor-General attributed this to weak oversight, poor monitoring, and disconnected planning across ministries.

In the Global Innovation Index (GII) published by the World Intellectual Property Organization (WIPO), “GERD performed by business” measures the research and development (R&D) conducted within private companies and corporate labs, shown as a percentage of the country’s Gross Domestic Product (GDP). This was recorded to be 0.6% of GDP in 2014 and 0.5% of GDP in 2025.[26] Among the top ten innovative countries by GII in 2025, Singapore and Switzerland notched 1.2% and 2.3%, respectively, for the same indicator.

The low investment in R&D, especially by the private sector, is reflected in the low number of patents; 75% of patents invented in Malaysia are foreign-owned, meaning that innovations at MNC subsidiaries in Malaysia mainly benefit their respective headquarters.[27]

In addition, Malaysia’s commercialisation[28] rate is only at an estimated 5 to 10 percent, compared with some highly developed economies like Japan or the USA, where commercialisation rates are as high as 60 percent.[29] Public universities which received government research funding struggle to commercialise their research despite having established commercialisation units[30]. This is due to several reasons, such as a focus on publication over commercialisation,[31] lack of commitment, and time barriers, as academics perceive their main tasks to be teaching, research and providing services.[32] Additionally, limited industry collaboration and weak entrepreneurial culture are among other barriers to commercialisation at public universities.[33]

Since the commercialisation units of public universities were deemed ineffective, MOSTI decided to form the Malaysian Research Accelerator for Technology and Innovation (MRANTI) by merging Technology Park Malaysia (TPM) and Malaysian Global Innovation and Creativity Centre (MaGIC). TPM was established in 1996, and MaGIC in 2014; the government merged the two into MRANTI in 2021; it is Malaysia’s central research and commercialisation agency. MRANTI fast-tracks the development of technological innovations from ideas to impact, serving as a connector, incubator, and catalyst from early-stage ideation to mature commercialisation and scale by offering integrated infrastructure, programmes, services, and facilities. So far, there has been no independent assessment of MRANTI’s actual impact on commercialisation.

Together, weak R&D and low commercialisation limit the number of genuinely innovative, scalable, and investable startups Malaysia can produce. This is a foundational problem that funding alone cannot fix. Instead, Malaysia needs to address the poor R&D output from public funding, especially to the 20 public universities, and the slow conversion rate of their research into commercial outputs. Although the barriers to this conversion have been identified, universities are slow to act on that knowledge.

There is no published formal review of SUPER’s overall progress. But two things suggest the government recognises the roadmap needs reinforcing: the plan is a full decade long, and since startup ecosystems change quickly, a static ten-year plan risks going dated.

That reinforcement has already begun. SUPER remains the foundational, big-picture blueprint, but in April 2024, Malaysia layered the KL20 Action Plan on top of it, aiming to make Kuala Lumpur one of the world’s top 20 startup hubs by 2030 through deeper access to funding, greater attraction of global talent, and stronger investor confidence. KL20 also targets specific industries: energy and green technology, manufacturing and automation, agricultural technology, and Islamic finance, and is backed by measures such as fast-tracked visas for foreign founders and investors.

Alongside it, MOSTI and MAVCAP launched the Malaysia Venture Capital Roadmap (MVCR) 2024–2030, which is a narrower, deeper dive into fixing the venture capital industry itself: making it easier to run a VC fund in Malaysia, better coordinating public and private funding across different stages of a start-up’s growth and building a local pool of venture capital talent.

Both KL20 and MVCR arrived three years after SUPER, largely because SUPER’s own 2025 milestones, in particular the five unicorns, needed an extra push. KL20 tackles funding, talent and startup quality broadly; MVCR focuses specifically on fixing the venture capital industry. Together, they are meant to accelerate, not replace, SUPER’s original goals.

Ultimately, hitting numerical targets matters less than what those targets are supposed to produce: a steady pipeline of well-run, competitive startups that can expand beyond Malaysia and give investors a clear way to eventually cash out profitably. More policy roadmaps alone will not turn Malaysia into a regional startup hub.

For endnotes, please refer to the original pdf document.