Over the years, the Selangor Information Technology & Digital Economy Corporation (Sidec) has organised various activities to help small and medium enterprises (SMEs) and start-ups in the state undergo digital transformation.

This includes the Selangor Accelerator Programme and Pitch@Selangor Series for start-ups, Selangor E-Bazar and e-commerce programmes targeting SMEs, and, most recently, the Selangor SME Digitalisation Matching Grant

Ultimately, Sidec hopes to nurture high-impact entrepreneurs, which is defined as those who have 20% or greater annual growth in revenue and employment, in Selangor. It also wants to transform the state into Asean’s digital hub by nurturing digital talent and helping start-ups become regional tech icons, among other goals.

“There are three things that we are focused on. One, we must have tech talent. Second, we must have speed. The third is capital. The difference between a start-up and a kopitiam is speed and capital,” says Yong Kai Ping, CEO of Sidec.

It is important to find these entrepreneurs and nurture unicorns in the state because this can contribute to job creation, innovation and wealth creation, he adds. “We didn’t have data scientists in Malaysia before, but now, because of companies like Grab, Shopee and Lazada, we have more than several hundreds of people working in such jobs.”

Sidec’s programmes focus on training, upskilling or reskilling entrepreneurs from SMEs or start-ups. The training is done both online and physically, with the videos available online to be rewatched.

So far, Sidec has successfully onboarded at least 65 e-merchants through its Online 100 and Brands 100 programmes, and worked with 33,144 new sellers through its E-Bazar in 2020. The total ripple effect to the economy from the E-Bazar last year was RM1.39 billion.

Meanwhile, the SME Digitalisation Matching Grant was introduced to help Selangor SMEs digitalise and survive the pandemic. The state government will provide a 50% matching grant or maximum of RM5,000 for each company to subscribe to a technology service provider. More than 100 service providers have been approved so far.

“SMEs that want to apply have to send the proof of their implementation to us, detailing how their efficiency has increased and how their costs have been reduced.

We will release the grants in two batches, in July and November,” says Yong.

The five areas of digitalisation targeted by the grant are e-commerce, human resources and payroll systems, cloud accounting and tax, digital marketing, and electronic-point of sale system and payment gateways.

“E-commerce is the easiest one because you can train SMEs to come onboard quickly. The most difficult one is to transform SMEs from traditional sectors like food and beverage and automotive industries,” says Yong.

But he is confident that it can be done. Sidec has nurtured many tech start-ups and SMEs in the state, some of which have become the technology service providers for the grant.

The state’s mission to cultivate high-impact entrepreneurs is also aligned with the Malaysia Digital Economy Blueprint, which aims to increase the number of start-ups in the country to 5,000, attract two unicorns and help 875,000 micro-SMEs adopt e-commerce.

The Selangor Accelerator Programme is one of two such large-scale platforms available in the state for entrepreneurs with ideas to scale their solutions.

“Of the 90 start-ups that we have cultivated through our programmes, 39 have received funding, which represents a 43% success rate. This is higher than the usual 10%,” says Yong.

Strengthening the ecosystem

A programme that Sidec hopes to introduce soon is the Selangor Innovation Ecosystem Alliance, which will assist start-ups to grow in three stages. The first stage covers skilling, upskilling and reskilling through Sidec’s existing programmes and in collaboration with coding school 42KL and Sunway Innovation Labs (Sunway iLabs).

The second stage includes accelerator programmes and mentorship opportunities for start-ups to grow. Other than the Selangor Accelerator Programme, start-ups could also join the Sunway iLabs Super Accelerator, NEXEA Accelerator & Entrepreneur Programme and ScaleUp Accelerator.

The last stage involves scaling the startup and funding. Investments can be obtained from the Selangor Innovation Fund, venture capitalists, angel investors, equity crowdfunding (ECF) and peer-to-peer financing.

“We want to create an alliance so everyone can talk to each other. If you want to co-invest in a potential unicorn, we can make that happen. We can help share the deal flow around,” says Yong.

“We also want to work closely with the Malaysian Business Angel Network to encourage SMEs or big companies to become angel investors. A lot of them want to work with start-ups but don’t know how to do it.”

Some of the activities that may run under this alliance are angel investor education workshops, pitching sessions to showcase potential deal flow to investors, networking opportunities and advocacy work.

Sidec will also help the start-ups connect with industry players and agencies that can become potential partners.

“Our mandate is to assist the start-ups in their business expansion by connecting them with all the potential agencies and government-linked companies in Selangor,” says Yong.

For instance, one of the start-ups to come out of Sidec’s programmes is Dropee, a business-to-business supply chain financing platform. Sidec is hoping to partner with the company to offer supply chain factoring as an alternative funding source for SMEs.

Kapitani, a peer-to-peer lending platform for farmers, is working with the state’s wholesale market to help small-scale vegetable sellers. Meanwhile, Binsho Solutions uses artificial intelligence (AI) cameras to grade oil palm fresh fruit bunches.

“They need to get to the commercialisation stage. If they do, they can reduce 5% of wastage of palm oil per tonne. All this is currently being done manually,” says Yong.

Sidec is also assisting Havva, a hydroponic and urban farming start-up, to set up more urban farms in the state. As for Petotum, which is akin to a Booking.com for pet hotels, Sidec wants to create a pet map for Subang and Petaling Jaya in collaboration with the start-up.

“It will show the locations of pet hotels, vets, grooming services and other places. Sidec will work with these start-ups either as a corporate social responsibility or business project like a partner,” says Yong.

–  The Edge