MDI Ventures, the venture arm of state-owned Telkom Indonesia, and fintech-focused venture capital (VC) firm Finch Capital have jointly made the first close of their $40 million fund, two sources familiar with the development told DealStreetAsia.
The two firms have forged a joint venture to create Arise, a fund that is slated to invest in Indonesia-focused tech startups, particularly those at post-seed or pre-Series A-stages.
“Some parts of the fund have been deployed in several investments, along with the first closing,” said one of the sources mentioned above on condition of anonymity.
When contacted, MDI Ventures declined to comment on the development. Meanwhile, Finch Capital hasn’t responded to our email.
The fund, which aims to make the final closing by the end of the year, plans to focus on three kinds of companies – fintech solution providers; and those that work in areas of SME digitization, besides enterprise enablers.
In an earlier interview with DealStreetAsia, Arise partner Aldi Adrian Hartanto had said that Arise aims to fill the “funding gap” in the archipelago in the early stages as many seed-stage VCs move up the ladder to focus on growth-stage companies. The fund has got commitments from third-party LPs and family offices.
For MDI Ventures, Arise completes its new multi-stage VC strategy to clock investments across diverse stages. Having launched a $150 million joint growth fund (Centauri) with South Korean firm KB in 2019 and a $500 million late-stage balance sheet fund in 2020, MDI Ventures seeks to bridge the early-stage funding gap along with Telkom through the new fund.
This year, the venture firm has invested in several companies. It led to the Series B round in Tanihub, an Indonesian agritech platform. Its other investments include fintech aggregator Cermati, last-mile delivery platform SiCepat and health tech platform Alodokter.
The firm forayed into venture investing in 2015 through a $100-million balance sheet fund that has been completely exhausted.
To support companies at the pre-seed level, MDI parent Telkom Indonesia runs an incubator programme called Indigo Nation.
While MDI continued to actively deploy capital during the pandemic last year, it did not publicly announce any exits. In 2019, in comparison, the firm managed to clock five exits, more than any other Indonesian VC firms.
Meanwhile, Finch Capital, which is focused on fintech investments, is also looking to make its first close for Finch Capital SEA II this year at $50 million.
Earlier this year, DealStreetAsia reported that the Netherland-based venture firm 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.
Finch Capital, which has offices in Amsterdam, London, and Jakarta, is an early investor in several startups in Southeast Asia. These include Singapore-headquartered ride-hailing giant Grab, Indonesia’s bill payments firm Ayopop, and reimbursement platform Jojonomi.
Several venture firms have raised new funds for Indonesia-focused investments lately.
Alpha JWC, for instance, has filed to raise $300 million for a new fund that looks to invest in seed to Series B stages across various sectors.
Likewise, Kejora Capital will raise $300 million for a new fund. Meanwhile, Mandiri Capital Indonesia, the venture capital arm of Indonesian PT Bank Mandiri Tbk, is set to launch two funds by the third quarter of this year. While Mandiri Venture Fund is slated to have a total corpus of around $50 million, the fund size of the Indonesia Impact Fund will be $25 million.