MDI Ventures, Finch Capital launch $40m Indonesia-focused early-stage fund

MDI Ventures, the venture arm of state-owned telecom firm Telkom Indonesia, has teamed up with fintech-focussed VC firm Finch Capital to launch a joint early-stage vehicle targeting a corpus of $40 million.

The fund, called Arise, will be structured as a joint venture between the two firms and will invest in Indonesia-focused tech startups particularly those at the post-seed or pre-Series A stages.

By focusing on early-stage investments, MDI and Finch believe that they will be filling a “funding and support gap” left by many seed-stage VCs that have moved up to focus on growth-stage companies.

In an interaction with DealStreetAsia, Arise partner Aldi Adrian Hartanto said, the fund is backed by Telkom Indonesia and Finch Capital, and has also received commitments from third party LPs. 

It is seeking to hit its first close early next year when it will also immediately start deploying capital.

For MDI Ventures, the new fund completes its new multi-stage VC strategy. Having launched a $150 million joint growth fund (Centauri) with South Korean firm KB last year and a $500 million later stage balance sheet fund this year, the new Arise fund will bridge the early-stage gap in Telkom’s tech investment playbook. 

To support companies at the pre-seed level, the telco firm has an incubator programme called Indigo Nation.

With MDI Ventures’ investment offerings to leverage, Arise says it provides a clear avenue for tech companies to validate, grow, scale, and eventually exit.

According to Hartanto, who is also VP of Investment at MDI Ventures, Arise will operate differently to many other seed and pre-Series A investors, who often offer very little beyond capital. MDI Ventures will help startups get plugged into Telkom Group’s various businesses.

“Further, because Arise is part of MDI Ventures, we are part of the BUMN ecosystem. This allows for startups under our umbrella to scale via corporate partnerships with state-owned enterprises,” he said.

Europe-based Finch Capital, meanwhile, will also provide startups with strategic opportunities with its LPs and corporate partners, as well as access to a network of Europe’s top digital experts.

The early-stage VC firm has a combined 25 years of investing experience in both Europe and ASEAN, and has been actively investing in Indonesia over the last few years, where it has also clocked one exit through the sale of its stake in fintech firm Cermati to local conglomerate Djarum Group.

By deciding to launch an Indonesia-focused fund despite the market uncertainty brought about by COVID-19, Finch, which is also in the process of raising a $75 million Southeast Asia vehicle, says it continues to have great confidence in the market’s recovery and potential.

“Covid 19 may lead to a technological renaissance that will accelerate the adoption of more digital solutions,” says Finch Capital managing partner Hans De Back. “Indonesia is already ASEAN’s largest economy but it is now also poised to become the region’s largest tech hub by 2025. We expect to see the birth of many tech companies riding a new ‘digital wave.’ Arise is ready to support these companies.”

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.