Reimagine Solutions to Address the Sustainable Development Goals (SDGs) by Scaling Impactful Startups

November 21, 2022

Artak Robert Melkonyan, Senior Advisor for PE Finance and Funds, UNDP Financial Sector Hub; Global Lead, UNDP Impact Venture Accelerators
Clara Yan, Partnership Coordinator, UNDP Malaysia, Singapore and Brunei Darussalam
Abdul Rahim Ismail, Partnership Intern, UNDP Malaysia, Singapore and Brunei Darussalam
Lydia Bill, Partnership Intern, UNDP Malaysia, Singapore and Brunei Darussalam
Kenny Lee Chee Wah, Programme Coordinator, Impact Innovation Ecosystem Development, Malaysian Research Accelerator for Technology and Innovation

At the end of 2020, the number of MSMEs in Malaysia was estimated at 1.2 million, equivalent to 97.2 per cent of total enterprises. They are the backbone of the economy and play crucial roles in creating decent jobs, improving livelihoods, and enabling the business environment. Therefore, as the country recovers from Covid-19, revitalizing and building the resilience of the MSME sector will be essential to economic revival and longer-term sustainable development. In that regard, the government of Malaysia has outlined two focus areas to catalyze MSMEs recovery: to pursue innovation, digitalization, and use of technology; and to inculcate environment, social, and governance (ESG) principles over the long term to ensure longer-term competitiveness and resilience.

In support of these efforts, UNDP Malaysia and MaGIC (now known as Malaysian Research Accelerator for Technology and Innovation (MRANTI) partnered to implement a Social Impact Challenge Accelerator program (SICA) in collaboration with 500 Global to accelerate the growth of established Malaysia start-ups. The SICA programme aims toenhance start-ups with business fundamentals to scale and the necessary knowledge to measure and scale-up impact towards the Sustainable Development Goals (SDGs). The programme primarily focusedon accelerating the growth of impact ventures targeting five priority fields; (i) enhancing ageing services for Malaysians; (ii) upcycling river waste to wealth; (iii) educating the future; (iv) innovating for children; (v) driving social impact - the startup way. An important component integrated into SICA - impact measurement and management (IMM) module enables businesses to quantify the positive and negative effects a company has – either directly or indirectly, intentionally or unintentionally – on people and the planet. Companies utilise this data to improve business performance and make better decisions to maximise positive impacts and minimise negative ones.

Five thematic challenge areas and a one-line description of the SICA start-up solution. More information about the SICA start-up can be found by clicking the link at the end of this blog.

SICA Graduation Happy Hour where participants, lecturers, mentors, and organizers shared their thoughts and experience of the programme

A total of 184 applications were received as a result of a nationwide call to start-ups to address the challenges identified by SICA challenge partners. 25 start-ups challenge winners were selected to undergo rigorous 10 weeks of mentorships and lectures to prepare for their scaled-up business pitch during Venture Showcase Day. Out of the total startups, there are over 95% have women-only or the involvement of both women and men in the management team. 69% of the startups are also contributing to gender equality by empowering women in their business model and mainstreaming women as part of the solution.

Baseline data derived showing gender composition in SICA’s start-ups

In the weeks’ Post Acceleration, 19 of the 25 participating start-ups have received commitments for investments from either challenge partners or investors since the Venture Showcase Day. While effort is ongoing to secure more investment, it is heartening to see that some of the ventures achieved particularly noteworthy accomplishments, including capital attraction. SICA has also opened up opportunities for the ventures to network and develop partnerships with impact ecosystem key players, 69.44% have nowconnected with new non-investor stakeholders.

“We closed our seed round (US$2mil) mere days after the SICA graduation.” - Pandai

“Raised our Pre Series A at the start of the program.” - FutureLab.my

“We're closing a partnership with one of the major banks in Malaysia to improve the financial literacy of our beneficiaries.” - MyBump Media

“New partnership opportunities, more awareness from the public, and a TV channel wants to feature us on their show!” - Teman Malaysia

The participants positively expressed learning skills and insights across several areas to help their ventures. Some of their most valuable learnings include business management, growth and sales, capital attraction, personal development, and impact measurement and management. When asked at the end of the program “what is the most valuable thing you’ve learned”, here is a sample of some of the participants’ responses:

“I learned how to manage my company direction better, deliver a good pitching deck and Impact Measurement and Management (IMM) module” ---Mohd Shakir Fathillah (Nova Engineering Services).
“I've learned the practical application of marketing, insights on fundraising and social impact” --- Jay (Firegent).
“IMM and how to balance our business between profit and social impact’’ ---Ahmad Aizudin (Sentuh Sinergi).
‘’We have a clear and measurable framework to base our work on. Such a more structured framework helps in measuring our success and impact, thus enabling us to plan next steps.’’ ---Jeannie Low (Play Unlimited).

'Impact' was voted as the most important key lesson learned by 11 of the 25 start-ups participating in the SICA program. This is followed by motivation in business 'mindset,' with 6 start-ups agreeing that it was the program's most important point. Meanwhile, 5 start-ups chose "pitching skill" and "funding" as their most valuable lessons.

Overall, opportunities for networking and enhancing Impact Measurement and Management (IMM) skills, as well as impact pitching skills, are among the benefits gained by start-ups through the Impact Measurement and Management mentoring session that serves as the program's baseline. The significance of IMM tools and skills can be seen in the increase in the average scale of IMM understanding among participants from 4.39 at the beginning of the program to 8.08 at the end of phase 2.

Additionally, participants also testified that the program had helped them to discover the intrinsic valuable nature their business could bring to the community.

“SICA program has helped us improve how and why we measure impact and highlight our beneficiaries better. We have a higher appreciation of our business impact, and so do our clients” -- Nadia Jalil (MyBump Media).

‘The SICA Accelerator Programme was intense, filled to the brim with information and tools that I will be using immediately in my business. It was also an excellent opportunity to meet and network with like-minded founders who are equally passionate about their businesses providing meaningful impact to our shared planet. I found my tribe.’-- Jo Luping (Siung Film Production).

Over the course of the pandemic, it has become even more evident that the financial system is not fit for its purpose of driving investment toward sustainable development and a more resilient future. With unbalanced impact-finance trade-offs, and inadequate knowledge and capacity to identify investable impactful pipeline projects, the credibility of impact claims is often in question. While there is a rapid proliferation of retail, institutional investors and funds incorporating ESG investing approach, investors are increasingly demanding insights on impact claims and require a coherent way to analyse results, compare performance, and make better decisions. It is here that UNDP can bring in its expertise to contribute, curate, and draw on partnerships to bring capital to impact - by improving accountability, disclosure, and transparency for sustainability and the SDGs.

To know more about the SICA alumni, check out the link provided below:

SICA Start-up Info: https://airtable.com/shrmELpHlSsGN8bqJ/tblm5NpXMm5atQm25

Venture Showcase Day: https://www.youtube.com/watch?v=EkE9Ty4cZpQ