Indonesia's MDI Ventures raises $500m fund

MDI said the fund establishes it as the country’s largest corporate VC, bringing assets under management to $790 million. The firm raised $100 million for its debut vehicle in 2015, beating a target of $75 million. Last year, it set up the $150 million Centauri Fund in partnership with Korea’s KB Investment.

The new fund will target domestic technology start-ups with a view to further digitizing the broader economy. This will include a strong focus on modernizing operations for state-owned enterprises (SOEs). MDI described the agenda as part of a government plan to create a “full-fledged, state-owned digital ecosystem.”

MDI estimates the local digital economy was worth $40 billion in 2019, with e-commerce driving most of the activity. SOEs are believed to have played an essential role in the consumer market’s shift toward digital-first and digital-only experiences to date, although gaps remain. The most significant traction on this front been in the modernization of state-owned banks through partnerships with financial technology start-ups.

“SOEs and tech companies can establish symbiosis by allowing start-ups to instantly access large corporate clients and their consolidated networks of consumers,” Sandhy Widyasthana, COO of MDI, said in a statement. “Meanwhile, these start-ups 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 start-ups can potentially have more exit opportunities later on.”

MDI has backed more than 40 start-ups in 12 countries since 2016 and positions itself as one of the best performing VCs locally. There have been at least eight exits, including Whispir, a cloud services start-up that went public in Australia, and fintech provider Red Dot Payment, which was acquired by PayU and Naspers at a valuation of $65 million. Wavecell, another cloud services company, was bought by US-based 8x8 in a deal worth $125 million.

MDI is recognized as one of the most aggressive corporate VCs in Asia despite pressure on companies to reduce spending on innovation in light of the current economic downturn.

Earlier this year, the firm appointed Donald Wihardja, co-founder of Indonesia’s Convergence Ventures, as its new CEO. This coincided with Convergence merging with fellow Indonesian investor Agaeti Ventures to form AC Ventures. Wihardja, a veteran IT executive, replaced Nicko Widjaja, who now leads BRI Ventures, the newly launched VC arm of Bank Rakyat Indonesia.

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• Topics
• Southeast Asia
• Fundraising
• Venture
• Technology
• Indonesia
• MDI Ventures
• TMT