MDI Ventures team
MDI Ventures, the corporate venture capital (CVC) owned by Indonesia’s state-owned Telkom Group, has announced the launch of a new US$500 million tech fund.
The new fund aims to bolster the digital transformation agendas of the archipelago’s state-owned enterprises (SOEs) at large.
The push is as part of an ambitious goal of building out a full-fledged, state-owned digital ecosystem.
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MDI Ventures claims with the launch the new fund, it has now become the largest corporate-backed, multi-fund VC firm in the nation, with more than US$790 million in assets under management.
Since 2016, MDI Ventures and Telkom have worked together to expand the telecoms company’s in-house digital capabilities. So far, it has invested in more than 44 startups from more than 12 countries.
The CVC is now on the lookout for tech startups that aspire to dominate the local market and help traditional, and largely offline SOEs, join the nation’s thriving digital economy.
So far, SOEs have played an essential role in Indonesia’s US$1 trillion modern economy. As the country’s consumer market is quickly shifting toward digital-first and digital-only user experiences, transformation is seen to be a top priority for local SOEs moving forward.
“Indonesia’s digital economy managed to reach US$40 billion in 2019, with the e-commerce sector acting as the main catalyst for the spike,” said Donald Wihardja, the newly-appointed CEO of MDI Ventures. “Increased ease of digital payments across the country and widespread consumer adoption also significantly contributed to this growth.”
“To maintain their strong footholds in the market well into the future, our SOEs know they need to embrace digital business models more profoundly than ever before. By allocating this fund in accordance with the government’s bold mission and by partnering with local tech innovators, Indonesia’s SOEs will be ideally positioned to thrive for generations to come,” he added.
In recent years, Indonesia had already been transitioning major SOEs into a fully digital paradigm. State-owned banks, for example, had released various tech innovations since 2018 and some even launched their own online and app-based lending platforms for SMEs.
They had also established key partnerships with numerous fintech startups such as Privy, Oy, LinkAja, and ModalRakyat.
Meanwhile, Telkom has been the driving force behind SOE digital transformation efforts at large. Since 2016, MDI has created multiple in-house synergies for its parent company and also cultivated a slew of highly profitable portfolio exits.
These included Melbourne-based Whispir’s IPO on the ASX, Naspers’s acquisition of Red Dot Payment at a valuation of US$65 million, and the acquisition of Singapore-based cloud communications platform Wavecell by US-based 8×8 in a deal worth approximately US$125 million.
Also Read: MDI Ventures names Donald Wihardja as its new CEO, aims to announce new funds this year
Sandhy Widyasthana, COO of MDI Ventures, commented: “SOEs and tech companies can establish symbiosis by allowing startups to instantly access large corporate clients and their consolidated networks of consumers. Meanwhile, these startups will furnish state-owned companies with value-added digital services that will help them adapt to a rapidly changing business landscape in Indonesia. This also means startups can potentially have more exit opportunities later on.”
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Image Credit: MDI Ventures
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