Kinesys Group, one of Indonesia’s newest early-stage venture capital firms, has reached the latter stages of its fundraising process and expects to close its $20-million maiden fund at the end of March.
Speaking exclusively to DealStreetAsia, Kinesys managing partner Steven Vanada said the firm has already started deploying from the fund, announcing five investments so far, with several others in the pipeline.
“We have five disclosed investments already and are closing three more soon. Plus, we are doing due diligence on two more companies. By the end of the year, we are targeting about 15 companies,” he said.
Founded in the final quarter of 2019 by Yansen Kamto, a former chief executive of local startup ecosystem builder Kibar, Kinesys cuts checks of up to $500,000 per deal for promising early-stage startups in Indonesia at the seed to pre-Series A stage.
The firm is backed and supported by Northstar co-founder and managing director Patrick Walujo, who sits as an advisor to Kinesys.
The firm’s five disclosed portfolio investments include edtech company Zenius, IoT startup Recharge, Muslim needs app Umma, new retail startup Wahyoo and F&B company Goola. All the companies have one common denominator, which, Vanada said, is the theme of Kinesys’ investments: digitalization of traditional sectors in the consumer market.
“We see there is a lot of potential in Indonesia that is yet to be discovered. There is a lot of existing businesses already and the market is big and so the only thing to do is just to activate the digitization,” he said.
At the moment, Kinesys is looking at sectors such as new retail, entertainment and lifestyle, education, healthcare and agriculture.
Vanada, who previously served as executive director of Japanese VC CyberAgents Capital and led the firm’s Indonesian investments, has been investing in the country since 2013. Among the companies he invested in are P2P lender Taralite, edtech company HarukaEdu and e-commerce unicorn Tokopedia.
Vanada said he was upbeat about the new generation of startups as the quality of founders in Indonesia has significantly improved.
“You see a lot of serial entrepreneurs – those who previously had a business or those that have failed in their previous venture, and also experienced founders or those that are ex-unicorn or VP level of some late-stage startups. Then, the diaspora is also increasing – people who are exposed to the international environment are coming back to Indonesia for the challenge. There are more quality founders compared to 7-8 years ago. The deal flow is there, it’s just how we filter and invest accordingly,” he said.
Having invested in some of these founders from its fund, Kinesys looks to add value by working closely with them to help grow their businesses, according to Kinesys founder Kamto, who over the last 10 years has built up an expertise in assisting early-stage startups through his work at Kibar and as an advisor to local accelerator Digitaraya.
“We are quite a hands-on investor. We prefer to work closely with founders. If some founders prefer a hands-off approach from investors, then maybe we are not the right partner for them. We like to sit down with founders, understand their vision and work closely alongside them by connecting them with people and other investors and the markets,” he said.
Kinesys’s entrance into the VC scene in Indonesia comes at a time when several of the country’s former early-stage specialists like Kejora Ventures, East Ventures and Alpha JWC have split their focus into backing bigger companies, having raised growth stage funds. Lippo’s Venturra and Indogen are among the few that have chosen to focus solely on early-stage investments. The newest player joining the early-stage investor club is OCBC NISP Ventura, the VC arm of local private lender OCBC NISP.
In the past year, however, the early-stage market in Indonesia has seen more regional and international players making a mark such as Singapore’s Quest Ventures, which is set to close a $50-million early-stage fund, and Europe-based fintech-focused VC Finch Capital, which is set to launch a $75-million SEA fund, with a large focus on Indonesia.
Arguably the biggest splash, however, was made by Sequoia, when it launched its accelerator programme Surge, targeted at seed-stage startups in India and Southeast Asia. In what is possibly a game-changer seed-stage game, Sequoia says it injects as much as $1-2 million into startups participating in its accelerator programme.