Sinar Mas and East Ventures have entered into a joint venture with Yahoo Japan to form EV Growth, a venture capital fund targeting to raise $150 million to be invested into growth stage startups in Southeast Asia with a special focus on Indonesia.
In a press conference held on Thursday, EV Growth announced that it has already received a total of $100 million in commitment from the three companies and will start operations in the second quarter of this year.
According to Wilson Cuaca, Founder and Managing Partner of East Ventures, the idea of forming the joint venture came about after the three companies had identified a gap in funding beyond seed and Series A investment by VCs in Indonesia.
EV Growth will look to tap this opportunity by providing funds for startups looking to raise Series B funding or higher.
“For ticket size, our target is $5 million to $15 million per startup. We think this is one of the biggest funds in Indonesia for growth stage. Usually after seed and series A, you would have to look abroad for funding, now we can get funding locally,” Cuaca said.
Franky O. Widjaja, founder of Sinar Mas’ venture capital arm SMDV, said the launch of the joint venture has come at the right time with the ecosystem growing and the government supporting startups with programmes such as 1000 Startups Movement and the Next Indonesian Unicorn (Nexicorn) initiative.
Yahoo Japan entered the joint venture through its SoftBank-backed venture capital arm YJ Capital, which has invested in 80 companies in Asia and the US.
YJ Capital CEO Shinciro Hori said Indonesia has been a long-time target for Yahoo Japan due to the country’s flourishing ecosystem indicated by the four startups that have attained the status of unicorns in the last couple of years.
However, he admits that the firm’s move to invest in Indonesia had been held back by the lack of local knowledge and representatives on the ground in the country. Hori believes that the joint venture with Sinar Mas and East Ventures is a solution.
“We come not only with funds but also with Yahoo Japan’s long experience in the field of internet,” said Hiro, who also confirmed that the joint venture is a 10-year fund and does not target specific verticals to invest in.
In the press conference, it was announced that EV Growth has already made investments in five undisclosed Indonesian startups. The joint venture fund is targeting to invest in 15 to 20 startups in the next few years.
On the sidelines of the press conference, Cuaca clarified that the $100 million raised by East Ventures as reported recently by this portal was, in fact, for EV Growth and not for East Ventures’ own early stage investments.
Other than the four unicorns Go-Jek, Traveloka, Tokopedia and Bukalapak, only a handful of Indonesian startups have raised Series B funding. Those that have done so recently include edtech startup Ruangguru, digital media company IDN Media and healthcare platform Alodokter.
Startups that are expecting to raise series B funding this year include P2P firms UangTeman and Investree.