Indonesia needs more entrepreneurs – 5.8 million to be exact, as declared by President Joko ‘Jokowi’ Widodo earlier this May – to secure both the country and the region’s economic development. Currently, the number of entrepreneurs in the Southeast Asia’s largest market is worrisome, with only 1.6 per cent of its total population. In comparison, Singapore has 7 per cent, Malaysia 6 per cent, Thailand 5 per cent, and Vietnam 3 per cent.
Pushing entrepreneurship in a country where education is still lacking, and access to funding is still limited can seem to be a grueling task. On top of that, there has never been a clear roadmap from the government to create a friendly ecosystem for young entrepreneurs, or for that matter the small and medium enterprises (SMEs) sector.
Data from the World Bank show that the SMEs is the key driver of Indonesia’s economy. The sector contribute around 60.3 per cent of total GDP and absorb almost 97 per cent of the total work force.
However, much of these businesses are still deemed unbankable.
Shinta Kamdani, CEO of Sintesa Group and chairman of Indonesian angel investment network ANGIN, said entrepreneurs cannot only rely on traditional financial institutions for funding. She believes that alternative funding sources, such as venture capital (VCs) and, especially, angel investing, could be the answer to Indonesia’s entrepreneurship funding problems.
“Angel investors play a very important role in pushing entrepreneurship and creating a sustainable ecosystem in Indonesia because it’s not just about funding. Angel investing is also about mentoring,” she told DEALSTREETASIA on the sidelines of Sankalp Southeast Asia Summit in Jakarta recently.
Kamdani, together with several of her successful friends, started to become angel investors in a few women-led startups in 2011. She quickly found out that the women were lacking business skills.
“These women did not know how to do business properly. From there we learned that they had to be guided, incubated, and trained, before even giving them any early-stage funding,” Kamdani said.
Kamdani also called for the government to come up with a definitive regulatory framework that supports entrepreneurship.
“We don’t have such things here at the moment,” she said.
Growing network, growing impact
Kamdani founded ANGIN as an investment network dedicated to early-stage investments in women-led startups, and was part of the programs offered by Global Entrepreneurship Program Indonesia (GEPI), which includes a startup incubator and co-working space in Jakarta.
The network initially comprised of a group of female angel investors – Svida Alisjahbana (Femina Group), Noni Purnomo (Bluebird Group), Gail Aluwi (Rodamas Wirasakti & Mitra Angkasa), Lanny Angkosubroto (Gunung Sewu Kencana), Lillie Tanmizi (MEEK), Mee Kim (Cilandak Executive Office Suit), Nellie Akili (Smailing Tour), Sheila Tiwan (Carsurin) and Tience Sumartini (KADIN).
After the spin-off from GEPI and the appointment of David Soukhasing as the new director in October last year, ANGIN has evolved into the largest angel investor network in Indonesia, with 40 investors and 15 invested startups.
ANGIN aims to grow its network to 60 angels this year, and will add another five startups into its portfolio. The network recently announced its 40th angel member in Sri Wahyuni Sujono, the managing partner of SF consulting.
Kamdani said that most angel investors in ANGIN have started to lean towards investing for social impact, but without overlooking the commercial aspect.
“On average, our investments are between $50,000 and $100,000. Most of our portfolio companies are still tech startups, but we are looking at other sectors, especially those who can give the most impact,” she explained.
Last week, ANGIN announced that it helped distribute an undisclosed amount of investment from angel investor Mariko Asmara (JAC Recruitment Indonesia) to Du’Anyam, a social enterprise that produces and distributes wicker crafts to empower and improve health of rural Indonesian women.
Founded in November 2014 by four women (Azalea Ayuningtyas, Yohanna Keraf, Melia Winata, and Zona Ngadiman), today Du’Anyam works with 270 women across 15 villages in their pilot program site of NTT supplying over 10,000 wicker products to hotels and resorts in Bali.
ANGIN plans to announce more investments in the upcoming months.