Grab leaving Malaysia is Kuala Lumpur’s loss to Singapore

The Finance Asia magazine published an article that may turn the Malaysian startup world upside down, telling why a start-up like Grab made it big in Singapore instead of Kuala Lumpur. Here’s the story of Grab Singapore, for that’s what it became — a Singapore success story with Malaysian origins.

Grab, which started as My Teksi in Malaysia, rebranded itself Grab Taxi after moving to Singapore, leaving Malaysia behind due to regulatory issues on raising funds from international venture capital.

The magazine quoted Chua Kee Lock, group president and CEO of Vertex, who told the online publication how the company persuaded Grab to make the move and explained why he expects more hot start-ups from the region to make the same move a la Grab Singapore.

He said the advantage of Singapore is that startups get government subsidies and tax breaks.  More importantly, start-ups and early-stage investors like Vertex get a well-developed ecosystem for start-up funding that helps attract international financiers and bring higher valuations for public offerings.

And using the facilities and the reputation of Singapore as a well-developed ecosystem for start-up funding that helps attract international financiers and bring higher valuations for public offerings, made Grab what it is today.

Though Malaysian venture capitalists are more prone to closing deals than their Singapore counterparts, Singapore has more billion-dollar success stories to inspire the budding entrepreneurs.

Singapore has Garena, Lazada and Razer as billion-dollar start-ups, while Malaysia has only one to show — and it is the company that has flown out of the  nest, that is Grab.

Asia Finance said while both Malaysia and Singapore have spent a lot of effort in encouraging innovation and entrepreneurship, Singapore has managed to create a stronger start-up ecosystem.

But it warned that Malaysia should not be written off since its biggest weapon remains cheaper labour than Singapore’s and that may turn the tide in the long run.

However, the question remains whether the Malaysian Digital Free Trade Zone being built in collaboration with Alibaba could help turn the tide for the Muslim majority nation?

Whispers are the Alibaba hub, as it is popularly called, may simply kill entrepreneurship since the latter has the reputation of eating up its competitors!