Indonesian conglomerate Lippo Group has modelled the structure of its investment vehicle, PT Multipolar Tbk, along the lines of Japanese multinational SoftBank Group’s Vision Fund, albeit on a smaller scale, a top executive said at the Asia PE-VC Summit 2021.
Speaking during a fireside chat session, Lippo Karawaci CEO John Riady stated that Multipolar will follow a similar structure as the SoftBank Vision Fund where SoftBank is the biggest LP as well as the manager of the fund.
“When it comes to technology and investing for the future, Multipolar is our entity,” Riady added.
“It’s advantageous to have a bigger balance sheet when you’re investing in technology. Obviously, on a much smaller scale, we’re pursuing the same strategy [as that of SoftBank Vision Fund], where we will be managing funds in which we are the biggest LP. Our plan is for every dollar that we invest, you raise $2-$3,” Riady said.
“In doing so, we are able to leverage on the deal flow that we see and able to deploy more capital support for our portfolio companies.”
Multipolar will look at raising capital from external LPs for its big tech investment bets.
“Multipolar is seeing interest from [partner LPs] who want to invest in Indonesia and I think they have seen that Multipolar has the track record and unique deal flow,” he added.
Multipolar will be announcing further details such as the target size of the fund and some of its partner LPs in the coming months.
Lippo’s investment arm is currently broadening its investment portfolio, starting from early to late-stage investments. With a net asset value of $1.5-2 billion, Multipolar has invested in over 40 companies since its inception in 2015.
Multipolar also targets to invest in the late-stage, and pre-IPO and IPO companies, including Bukalapak, and GoTo Group.
Besides investing in tech companies, Multipolar also seeks to partner with tech companies and other Lippo business units, including the retail business (MPPA) and Matahari Putra Prima (LPPF), banking (Bank Nobu) and internet infrastructure (Link Net).
Last week, Multipolar diluted its shareholding in MPPA to 31.59%, from 38.33% earlier, as GoTo bought shares in the retail unit for $25m. GoTo and Multipolar also plan to participate in a rights issue that MPPA aims to conclude in the fourth quarter this year, according to a filing to the Indonesia Stock Exchange. The retailer did not disclose how much it is seeking to raise.
Earlier this month, Lippo Group exited from e-wallet business OVO, along with Tokopedia, following Grab’s increased stake in the Indonesian payments firm as part of the ownership restructuring.
Most recently, Multipolar also announced its investment in Bukalapak, the first unicorn of its generation to list on Indonesia’s IDX, and in Mahaka Radio, the parent company of podcast and digital audio firm NOICE.
Lippo Group has been active in the tech investments since 2015. Through its venture capital unit Venturra Capital, the group has backed prominent tech startups including Zilingo, Sociolla, Fabelio and RuangGuru. It has invested in more than 20 companies in Indonesia, Singapore, and Vietnam.
Riady noted that the total valuation of Indonesian tech companies has grown from $16 million in 2014 to $60 billion by this year. He expects the number to reach $400 billion in the next couple of years.
Reflecting on the tech developments in China, he said, the first generation Chinese tech companies, including Alibaba, Tencent, and Bytedance that tapped the public markets, have resulted in the MSCI China being 25-26% tech weighted. “Compared to that, Indonesia’s tech companies today are at 0% tech weight [on the MSCI index],” he said.
“As we see a lot of enthusiasm following Bukalapak’s successful IPO, I believe Indonesian tech companies are the biggest value creation opportunity. [Going forward, we think tech sector] will weigh around 10-15% in MSCI Indonesia Index in the next couple of years,” he added.