AI-related startups account for about 60% to 70% of Cradle Fund applications
Investors are scrutinising technology and founders’ industry expertise as more startups position themselves around AI, conference panellists said.
Cradle Fund receives an estimated 1,000 applications annually, with about 60% to 70% coming from AI-related startups, according to group chief executive officer Norman Matthieu Vanhaecke. He said the increasingly crowded field was making funding decisions harder for the agency and venture capitalists.
Speaking at the Alliance Bank BizSmart Business Conference, Vanhaecke said more startups were describing themselves as AI-driven, AI-enabled or AI-native. Cradle Fund manages taxpayer funds, and he said its investments must deliver returns to the country and its people.
Sunway iLabs chief operations officer Karen Lau said investors needed to separate genuine AI capabilities from branding. Their assessment includes how defensible a startup’s technology is, whether it adds a layer to existing frontier models, and whether it can become deeply embedded in customers’ operations. Sunway iLabs is Sunway Bhd’s innovation arm.
For 1337 Ventures, founders’ knowledge of industries such as healthcare, fashion or marketing is a funding priority, said CEO and founding partner Bikesh Lakhmichand. He said startups must show how their technology solves particular workflow needs, while generic AI applications could encounter stronger competition as foundation models develop.
Vanhaecke said startups could distinguish themselves through niche solutions suited to Malaysia as well as regional and international markets. The panel also highlighted investors’ growing emphasis on traction, market potential and scalability rather than AI positioning alone.
