- Launched corporate VC structure in wake of missed opportunity to invest in Grab in its early years
- With 13 different business units, pitch to founders is that Sunway can open doors to real customers
Who knew that when Sunway Group, one of the largest conglomerates in Malaysia, launched its corporate innovation and startups investing arm, Sunway Innovation Labs Sdn Bhd (Sunway iLabs) in 2017, it was motivated by a missed opportunity to invest in Grab in the early days of the startup around 2012/2013?
This snippet was shared by Evan Cheah, Sunway Bhd deputy president and son of its founder, Jeffrey Cheah, when speaking on Wednesday at Cradle Fund’s ‘Startup Asean Summit’ held in Kuala Lumpur.
While not naming Anthony Tan, Grab’s co-founder, Cheah described having a good friend who did his pre-uni at Sunway University, undergrad at University of Chicago and MBA at Harvard and who, upon coming back to Malaysia to launch Grab had asked Cheah if Sunway wanted to invest in Grab.
“But we didn’t have a platform that allowed us to invest in a startup then. And of course, we know what happened to Grab since then,” Cheah said, ruefully adding that when they were ready to invest in Grab, its valuation had soared to around US$10 billion (RM41.8 billion).
This triggered a self-realisation within Cheah, a second-generation leader at Sunway in a fast-growing Southeast Asia region which was rapidly adopting the digital economy. “What was I going to do,” he mused.
In 2016, Cheah pulled a small team together to tour Silicon Valley and the region’s VC circuit. “I was the guy with a tie, corporate guy, the weird guy,” he says, but the exposure led to Sunway setting up iLabs in 2017 and its corporate VC arm in 2018 and start looking into Southeast Asian tech startups.
The mindset shift was simple: act like an operator, partner like a platform. Cheah’s confidence in Malaysia’s exit paths underpins this stance. “Our public markets are more aggressive than the VCs,” he argues, pointing to a risk-taking culture on Bursa where many new listings this year have done well.
Building an innovation machine, not a lab
Sunway’s pitch to founders is that it can open doors to real customers, not just conference rooms. After all, being part of a conglomerate with 13 business units, from hospitals to construction to education, give it many doors into B2C and B2B demand. “We build MRTs, highways, and most recently, of data centres in Johor,” notes Cheah. The same group builds malls and hotels, and runs Sunway University as a not-for-profit with more than 100,000 graduates.
That range lets Sunway design across silos. “Most of our hospitals feel like you’re in a mall or a hotel,” because property, hospitality and construction teams co-design the experience. The same integration logic now pulls startups into the mix. In healthcare, Sunway has deployed an FDA-approved AI radiology tool from a healthcare startup to boost accuracy and throughput.
There is more to come, Cheah said. “We are very excited. There is a lot of innovation happening and we feel that with our ecosystem, we can take things forward.”
When partnerships click: from mall tenants to a 3× exit
One early win from iLabs came from watching tenant behaviour in Sunway’s malls. Retailers wanted to sell on online marketplaces, but many lacked the capability. Sunway invested in a Southeast Asian e-commerce enabler that could onboard them to platforms like Shopee and Lazada. Then COVID hit. Demand spiked, a UK media company acquired the startup, and Sunway exited with “a 3x return” two years after it made its investment.
Cheah noted that this was an important early win. “At least the board sees some cash and it’s credible (nurturing and investing in startups).”
Crucially, execution did not end at writing the cheque. Sunway typically will introduce the startups to its various mall tenants and open the Malaysian market, using its ecosystem for validation and early customers. Not every tenant bit, but enough did to help the startups prove product-market fit.
These are the partnerships founders want, and which some corporates struggle to deliver: access, not just advice.
The playbook: sponsorship, quick wins, perseverance
Sharing key experience and lessons with other conglomerates looking to launch their corporate venture capital, Cheah distils Sunway’s lessons into three, hard-won points.
First, senior leadership support. “You need sponsorship from the top,” he says. Sunway’s breadth across 13 industries made leadership more open-minded and pragmatic about new bets. A mono-line property developer, he suggests, would find this harder to adopt.
Second, quick wins that show cash, not paper gains. “If it’s all paper gains, the senior sponsorship may slowly reduce (its support),” he warned. Early successful exits, like with the e-commerce startup, buy credibility and patience for the next wave.
Third, continuity. Follow the good companies through rough patches. During COVID, some co-investing VCs balked at making follow-on investments. Sunway leaned in, funded through the turbulence, and exited later. “Do not chicken out halfway,” Cheah cautioned.
In an age where AI is touching every industry, Cheah wants more Malaysian corporates to get off the sidelines (and support startups), believing that the next few years should see more Southeast Asian tech successes, “hopefully in Bursa Malaysia too.”
With Sunway already positioning itself as an open door for startups seeking B2B routes, with a team to evaluate the right fit and VC partners ready to co-invest, he is bullish about the group’s startup future.
And if any of the wins come from AI startups, “then your valuation is probably going to be 100x more,” he quips. Who needs Grab then.
AI was used to generate the initial draft of this article before an editor worked on the published version.
Henry Chang Jie Shen contributed to the article.
