Having established a growth stage fund with South Korea’s KB Investments just last year, Indonesia’s MDI Ventures, the VC arm of state-owned telco firm Telkom Indonesia, will be launching a seed-stage fund, as well as a later stage vehicle this year, according to its managing partner Kenneth Li.
“We will have a different fund for the seed stage, a different fund for growth stage and also expect to have a separate fund for the later stage. This way we can have better portfolio management because different stage companies have different timelines for exits,” Li said in an exclusive interview with DealStreetAsia.
Once launched and raised, the two new funds will be managed in parallel with MDI’s existing funds – Centauri growth fund with KB with a target corpus of $150 million, and a $40-million fund with Telkom subsidiary Telkomsel.
Furthermore, Li said the firm is also expecting to raise a second balance sheet fund from its parent company, which may go into its planned later stage fund or could even make up “a separate growth fund just for synergy”.
For MDI, which also runs an incubator called Indigo, this new strategy of having different funds to cover all stages of a venture’s life cycle was based on learnings from its debut fund. The $100-million balance sheet fund, launched in 2016 and now fully deployed, saw the firm initially investing in growth-stage companies, but later went down to seed level, having identified gaps in the market and also in its investment capabilities.
The different funds will allow MDI, which achieved five exits last year – more than any other Indonesian VCs, to have better portfolio management and a stronger foothold in the game from pre-seed level through Indigo, all the way up to pre-IPO stage through its later stage fund.
“We definitely expect MDI to be bigger than what it is right now and I think with all these new initiatives and new funds that we are setting up, we expect to compete in every stage because we believe that in order to help the local and Southeast Asia ecosystem, we want to have all the vehicle necessary to be investing in the very early stage all the way to the later stage,” Li said.