MDI Ventures, the corporate venture arm of the country’s largest telco operator Telkom Indonesia, has formed a joint venture fund with KB Investment, a unit of South Korea’s financial giant KB Financial Group.
The joint venture fund is targeting to close at $150 million.
In a filing with the Indonesia Stock Exchange (IDX) on Wednesday, MDI Ventures said the joint vehicle — Centauri Fund — will also raise capital from external investors (LPs) with KB entities and Telkom Indonesia being anchor backers.
According to the filing, MDI will invest a maximum of 10 per cent from the capital raised by the Centauri Fund across tech startups in Southeast Asia. It seeks to start disbursements from January.
Centauri Fund is led by Managing Partners Kenneth Li and Jong Pil Kim, with headquarters in Jakarta, Indonesia, and Seoul, South Korea. The fund aims to invest in tech startups throughout ASEAN, with a focus on its largest market, Indonesia.
The fund will look to invest between $1 million and $5 million per deal in financial technology, e-commerce infrastructure, software-as-a-service, big data, and “digitally native vertical brands.”
Li joins MDI Ventures, an over $140 million corporate venture capital initiative under Telkom Indonesia, where his team was able to generate seven exits within three years of its first investment. Meanwhile, Kim joins Centauri Fund from KB Financial Group.
“The launch of Centauri Fund is a commitment by both TelkomGroup and KB Investment with the aim of expanding their horizons deeper into the Southeast Asian tech ecosystem, as well as supporting Indonesia and the regional startup space,” Achmad Sugiarto, Director, Strategic Portfolio, Telkom Group said in a statement.
According to the statement, Southeast Asia is the next region to experience a wave of “hypergrowth,” which experts compare to an economic boom driven by technology in China 20 years ago.
“Take, for example, the tech consumption leapfrog effect in China, where the majority of the population skipped over using PCs and laptops and went directly to smartphones,” Li said. “Southeast Asia is experiencing a similar phenomenon. The region is bypassing many aspects of traditional growth and development. This is something we believe we can help accelerate in the region.”
KB Investment has been investing in around five Southeast Asian companies a year since 2013. The joint fund will strengthen its presence in the region, it said.
KB Investment’s parent company, KB Holdings, is one of the largest financial groups in Korea with assets under management of $400 billion. The group comprises numerous subsidiaries and assets including KB Kookmin Bank, KB Kookmin Card, KB Investment & Securities, and KB Life Insurance.
Telkom Indonesia is a multinational state-controlled telco company listed on multiple exchanges. Its main business includes internet, IT service, data communication, and fixed-line phone service.
A slew of Korean and Southeast Asian entities have formed joint funds to establish a strong foothold in the region. Korean VC firm InterVest has a partnership with Indonesia’s Kejora and conglomerate Hanwha has set up a joint fund with Golden Gate Ventures.
Meanwhile, Shinhan Financial Group has set aside $25 million for investments in Vietnam, Indonesia, and South Korea through its accelerator Shinhan Future’s Labs.