Indonesian private investment firm Arkblu Capital is targeting to make up to four direct investments into startups this year, while also looking at potential venture capital funds to invest in.
Arkblu follows a two-fold strategy where it invests both in startups as well as VC funds.
“Our investment standard will be much higher during the pandemic, but we envisage we will be making 2-4 new direct investments this year,” said Arkblu Capital partner Edric Satyaka Widjojo. “From a fund investment perspective, we are also identifying GPs who are raising funds this year that match our investment criteria.”
As far as its direct investments are concerned, Widjojo said Arkblu will be eyeing startups with sustainable growth prospects and unit economics that make sense in the long run despite a drop in performance during the pandemic period.
“Thus, food and beverage, travel and other tech-based consumer sectors, which have been heavily impacted during the pandemic, are still very attractive industries to us,” he said.
Last year, Arkblu, which cuts cheques of up to $500,000 for pre-seed to Series A stages companies, made five direct investments into Indonesian startups. These include D2C retail startup Hypefast, travel tech company Izy.ai and SME tech startup Wahyoo, among others.
It also ended the year with a fund investment portfolio that includes multiple funds with operations in Indonesia and Singapore.
This year, while it will continue to make investments, Arkblu says its priority would be managing its existing portfolio in its fundraising efforts.
“We have also been expanding our internal team to prepare us for this upcoming year,” said Widjojo, who leads Arkblu’s operation together with cousin Francisco Widjojo.
Traditional businesses to play VC game
Structured similar to a family office, Jakarta-based Arkblu Capital says its fund is derived from the balance sheets of a group of affiliated companies. Though the firm declined to disclose the identity of the companies behind its fund, DealStreetAsia understands that it is linked to local pharmaceutical and consumer goods giant Ultra Sakti.
Founded in 2019, Arkblu joins an exclusive club of family offices in Indonesia that has jumped into the venture investment game by making both direct and indirect investments. Its peers include Emtek (media), Mahanusa Capital (investment) and Gunung Sewu (agribusiness).
Other more diversified family offices and conglomerates like Lippo (real estate), Sinarmas (pulp and paper) and Djarum (tobacco) have preferred to position themselves predominantly as LPs, investing in funds managed by affiliated and third-party GPs.
Widjojo says more traditional businesses – many of smaller sizes – are joining the venture investment party, partly spurred by the impact of COVID-19.
“Many traditional businesses are recognising this systemic change in consumer behavior, and the opportunities that will arise from this change, hence resulting in a new wave of investors acquiring interests in early-stage tech companies in the country,” he said.
Widjojo explained that operationally, mid-sized Indonesian companies are becoming warier of the potential fragility in their business because of the economic slowdown caused by the COVID-19 pandemic.
Such businesses, he reasoned, need to come to terms as to how they can add greater resilience into their business models and become more adaptable, most likely with tech. However, he noted that not all will take the route of tech investment.