The Masters of Cashflow Podcast is hosted by Andrew Senduk, and is all about venture capital in South East Asia. He interviews the leading investors in South East Asia, from prolific angel investors, upcoming VCs, and leading CVCs in the game.
Andrew Senduk is a serial venture builder, who raised $ millions of venture capital for his ventures, and is currently the Managing Director at Workmate, Indonesia. Workmate’s vision is to help companies simplify the hiring and management of their blue-collar workforce and by doing so make an impact on the millions of blue-collar workers across SEA. Senduk has built multiple high-growth companies from scratch since 2009 and is a global keynote speaker and author of Ignite Millennial Leadership (2018).
Nicko Widjaja is the CEO of BRI Ventures, the venture capital arm of Bank BRI, the biggest bank in Indonesia based on assets that launched its’ first US$250+ million venture fund. In November 2020, its second fund, called Sembrani Nusantara (SN), was launched, which is a mix of equity and venture debt funds.
Widjaja is an early tech investment pioneer, his career spans over 15 years in venture capital, corporate transformation, and startup ecosystem. He was formerly the CEO of MDI Ventures, a Telkom Indonesia-backed venture capital with investments in over ten countries. Under his leadership, MDI Ventures has become one of the most profitable venture capital firms in the region, with two international IPOs (ASX and TSE) and four trade exits in just four years since inception.
Indonesia’s ever-growing stature
“Silicon Valley is the centre of innovation, South East Asia is the centre of opportunity, and Indonesia is going to be the centre of development and engineering.”
This is Indonesia’s 11th year of the tech ecosystem, and there weren’t a lot of “pearls” back then. There weren’t any “US$100 million funding” headlines or guaranteed unicorns in the making. Sure an angel check or seed round here and there, but nothing spectacular. It’s amazing to see how the ecosystem has evolved into the eight unicorns Indonesia counts at the moment (2022) and the massive value creation that is produced by homegrown companies.
Investment funds usually have a three-four year investment period and a five-six year harvesting period. This means the first full investment cycle has been completed. In other words, it’s the moment of truth for the ecosystem, and several homegrown startups have “made it” to the big league, unicorn status. On the day of the recording of this podcast, Grab went IPO via a SPAC with a valuation of US$40 billion. A major milestone for SEA’s tech ecosystem.
Corporate venture capital (CVC) vs traditional venture capital (VC)
CVCs differentiate because they follow a strict investment thesis and, therefore, usually are not agnostic. There should be synergy with the core business, and before CVCs invest, they usually ask questions like:
- Does the startup fall in the category of investment?
- What stage are they in?
- What market are they serving?
- What is the synergy with the core business?
Is it strange that a company like Grab can double the valuation in 18 months?
Also Read: How AlphaJWC Ventures built Indonesia’s largest early-stage fund
No, because most companies are still undervalued. Compared to companies like SEA, many homegrown companies have not shown their full potential yet. Even though the pandemic has accelerated growth and digital adoption for many tech companies, there is still much room for growth.
Is there a shortage of money?
Money is overflowing in the region, it’s becoming a commodity instead. Money is not the challenge. The challenge is more on the founder’s side, from who will they accept the money? Investors are increasingly thinking about how they can convince founders to accept their money.
The myth of being an investor is that any startup will take their money. But if that’s the case, you’re not a good investor, because clearly, you’re fishing in the wrong startup pond. Investors need to create stories and make sure they work for startups, and not the other way around.
Role of (hyper) growth nowadays
Growth is not a matter of metrics anymore, it’s about the founder’s vision. Will they stick with the old playbook, or can they evolve into a multiple-arm strategy? Look at how Gojek or Bukalapak have evolved into mini conglomerates.
Comparison between the investment space and the music space
- Investors are the record label
- Startups are the artists
- Verticals (i.e. e-commerce, logistics, fintech, edutech) are the genres
It’s the investor’s goal to make their artist into top-selling artists!
Listen to the full podcast episode here. Check out the podcast on Spotify and Apple.
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