Budget 2027 Puts RM450mil Behind Startups — While Bigger Cheques Chase Mid-Tier Firms

Budget 2027 finally puts a headline number on Malaysia’s startup push: RM450 million (about US$110.4 million) through the National Fund of Funds Jelawang Capital and Dana Perintis, the Retirement Fund (KWAP) startup vehicle. Prime Minister Anwar Ibrahim, who is also Finance Minister, told Parliament that founders need support from idea stage through seed capital and scale-up.

Follow the money — mid-tier still leads

That startup line matters, yet it is not the biggest cheque in the speech. About RM2.1 billion from the NIMP fund, KWAP’s Dana Pemacu and Khazanah’s MTC Fund is earmarked to strengthen mid-tier companies in E&E, digital technology, aerospace and medical devices. Add roughly RM1.2 billion from Khazanah and KWAP for local semiconductor firms, plus RM6 billion across ministries for research, development and commercialisation, and early-stage startups sit further down the priority list.

"Startups need support at every stage, from ideas to seed capital and scaling up," Anwar said.

Private capital nudges and chip follow-ons

More interesting for many founders may be the tools meant to pull private money in. The budget sets aside RM270 million to support SMEs, mid-tier firms and social enterprises raising through equity crowdfunding and peer-to-peer platforms. Income-tax exemptions for individual ECF investors and for angels backing early-stage tech startups are extended to 31 December 2030. Cradle Fund receives RM41 million for the Malaysia Startup Ecosystem Roadmap plus prototype and commercialisation grants.

• RM450 million via Jelawang Capital and Dana Perintis for startups
• RM2.1 billion tilted to mid-tier E&E, digital, aerospace and medical devices
• RM270 million to back ECF and P2P fundraising
• Angel and ECF tax breaks extended through 2030; Cradle gets RM41 million

On chips, MTDC’s SemiconStart programme will offer follow-on equity for IC design, advanced packaging and semiconductor materials startups — the stage where deeptech often stalls. Khazanah is also working with Selangor on a state semiconductor fund, alongside the already-announced RM100 million Penang strategic investment vehicle with InvestPenang.

What this means for Malaysian readers

Founders should read Budget 2027 as a clear pecking order: build the industrial middle and the chip stack first, then seed the startup layer. The RM450 million pot is real, but speed and mandate at Jelawang, KWAP and Cradle will decide whether term sheets arrive in 2027 or sit in committees. Angels and ECF investors get a longer tax runway to 2030, which helps portfolio planning. SMEs that are not pure startups still have paths through P2P, ECF matching support and mid-tier industry funds. Local AI startups may also notice the irony of public money expanding free subscriptions to foreign chatbots while sovereign AI rhetoric grows — another reason to watch where MDEC’s smaller MSME AI grants actually land.

Source: e27 — Malaysia's Budget 2027 hands startups US$110.4M but the bigger cheques go elsewhere