Netherlands-based early-stage fintech investor Finch Capital is looking at a co-investment arrangement with Central Capital Ventura, the venture capital arm of Indonesia’s largest private lender Bank BCA, for its Southeast Asia fund targeting a corpus of $75 million, DealStreetAsia has learnt.
According to industry sources, the team-up will see both parties leveraging on each other’s strengths. BCA, for example, is expected to gain access to Finch’s global network and deals, while Finch will have exposure to BCA’s ecosystem and local network.
When contacted by DealStreetAsia, Finch Capital and CCV declined to comment on the development.
In 2019, Finch told DealStreetAsia it was planning to raise a $75-million vehicle targeted at early-stage startups in Southeast Asia, with a focus on the Series A stage. While the firm had since begun the fundraising process, its progress had been hampered due to COVID-19-induced travel restrictions.
Parallelly, Finch is also raising a separate Europe-focused vehicle with a target corpus of $200 million.
The partnership with Central Capital Ventura comes just two months after Finch announced a collaboration with MDI Ventures, the venture arm of state-owned Telkom Indonesia.
The pair launched a joint early-stage vehicle targeting a corpus of $40 million. Called Arise, the new fund plans to invest in Indonesia-focused tech startups, targeting the post-seed or pre-Series A stage.
With these partnerships, Finch Capital expects to gain access to two unique ecosystems to source deals.
While Finch will look at a broader range of sectors with the Arise fund, it will access fintech startups at the Series A and above stages with the CCV partnership, sources said.
Finch Capital has been actively investing in Indonesia over the last few years. Its Southeast Asia portfolio includes bill payments platform Ayopop, reimbursement platform Jojonomic and regional super-app Grab. The investor also clocked an exit in 2018 when it sold its stake in fintech firm Cermati to local conglomerate Djarum Group, a shareholder in BCA.
CCV, meanwhile, has been investing purely from the balance sheet of BCA and predominantly in early-stage fintech companies. Its $15-million maiden fund has backed insurtech startup Qoala, payment company Wallex, and biometric platform Element. In late 2019, BCA injected an additional Rp 200 billion ($14.26 million) into CCV to pursue further investments in fintech startups.
The Finch-CCV partnership will mean one less competitor in the fintech-focused VC space in Indonesia. Other active fintech investors include Mandiri Capital Indonesia, BRI Ventures and OCBC NISP Ventura.
Sector-agnostic VCs too have been targeting fintech investments over the past few years, a trend that has led to the growth of payment unicorns such as OVO and GoPay while a number of lending startups are inching closer to join the coveted $1-billion valuation club.
Beyond payments, lending and financial marketplace verticals, VCs are now demonstrating increasing interest in new sub-sectors such as insurance and wealth management.