Malaysian-listed automotive replacement parts manufacturer New Hoong Fatt Holdings has committed up to RM20 million (US$4.9 million) as the anchor investor in Cypress Drive Ventures, a debut fund with a target of RM50 million (US$12.2 million). The fund is managed by Cypress Asia, founded by entrepreneur and investor Sivapalan Vivekarajah and former pitchIN chief operating officer Xelia Tong. It will target profitable technology-driven Malaysian companies at the Pre-Series A and Series A stages, marking a notable corporate backing for first-time venture managers.
Fund Strategy and Investment Criteria
Cypress Drive Ventures is seeking the remaining RM30 million from family offices and other investors. The fund plans to invest between RM1 million and RM3 million per company, beginning with five to seven businesses and growing to 10 to 12 if the full target is met. It has a seven-year term with two successive one-year extensions and expects to make its first investment in the first quarter of 2027.
The managers will focus on technology-driven businesses across sectors such as electrical and electronics, automotive, digital health, and agriculture. They will avoid highly regulated companies, firms dependent on state government contracts, pure software businesses, and e-commerce-driven operations. The goal is to back companies that can grow profitably and reach a listing or acquisition with only one or two additional funding rounds after the fund invests.
Governance and Anchor Commitment
New Hoong Fatt will invest through its wholly-owned subsidiary Jhi Soon Manufacturing Industries by subscribing for up to 20 million Class A redeemable preference shares at RM1 each. The vehicle has a four-person investment committee with two nominees each from New Hoong Fatt and Cypress Asia Capital. A decision requires a simple majority that includes at least one New Hoong Fatt nominee, giving the corporate anchor an effective veto over every deal.
Talks between the family behind New Hoong Fatt and Xelia Tong lasted around two and a half years as the group sought innovation exposure and income diversification. The commitment was originally RM10 million, then rose to RM12 million for an application to Jelawang Capital's Emerging Fund Managers' Programme, and later increased to RM20 million even after the fund was not selected. The listed company funded its commitment internally and will pay in stages as investments are made.
Team, Deal Sourcing, and Market Context
Sivapalan brings nearly four decades of experience as an entrepreneur, coach, and angel investor, while Tong has held investment roles at Malaysia Debt Ventures and Cradle Fund before working at ScaleUp Malaysia and pitchIN. They previously worked together at ScaleUp Malaysia and invested in 38 companies. The fund will source deals through these networks, including the Soonicorn Collective, pitchIN, equity crowdfunding platforms, and other venture firms.
The team aims to identify companies that can reach RM8 million to RM10 million in profit within five years, providing a credible path to a stock market listing or acquisition. This approach is intended to avoid repeated rescue rounds and to ensure that new capital accelerates an existing business rather than financing prolonged losses. Cypress Asia is open to leading a round, co-investing, or joining an existing group of investors.
The fund's structure highlights a potential role for cash-rich Malaysian listed companies in the venture ecosystem. Corporate investors already supply about 28% of commitments to Malaysian venture funds, while government agencies supply about 40%, according to Securities Commission Malaysia data. If the model succeeds, other listed companies could follow New Hoong Fatt into venture investing, and returns could be built on profitable exits rather than rising valuations.
The Cypress Drive Ventures launch represents a practical test of whether a listed manufacturer can anchor a first-time venture fund with a disciplined, profit-first investment thesis. It combines experienced operators, a tightly governed fund structure, and a focused mandate around profitable technology-driven companies. The outcome may influence how private Malaysian capital participates in early-stage technology investing.
Source: Theedgemalaysia