BRI Venture Prepares IDR 300 Billion for 15 Startups
PT BRI Ventura Investama (BRI Venture) launched the BVI Venture Fund for Sembrani Nusantara, with the focus to provide funding for digital startups in Indonesia and can raise funds of up to IDR 300 billion.
This venture fund will not only focus on the financial technology (fintech) sector but EARTH, Education, Maritime Agro, Retail, Transportation, Health (Health).
BRI Venture CEO Nico Widjaja said it was eyeing around 10-15 startups at an early stage, which was spearheaded by a local founder. Moreover, Indonesia has an important role in the digital economic ecosystem in ASEAN, especially with its large market.
“Fundraising this time is IDR 300 billion, we have commitments from other funding institutions. It can reach 10-15 with the EARTH sector that is launched, 2-3 years later for deployment because this is an early stage so the timeline cannot be fast,” Nico said at the launch on Wednesday (06/24/2020).
The presence of the Sembrani Nusantara Venture Fund is expected to accelerate local startups by presenting digital-based products or services both online and offline. Funding will be focused on the seed-growth stage which consists of seed funding and Series A initial funding (Series A).
Innovative Startups are Targeted by BRI Ventures
Nico said that despite the current difficult situation due to the COVID-19 pandemic, innovative startups usually emerge in times of crisis like this. He emphasized that his philosophical investment will not change especially with an increasingly mature ecosystem. For this reason, BRI Venture is not only looking for startups that can survive the crisis, but also its sustainability and innovation.
“Startups must be more sustainable going forward, which is important for us, startups that are important for a fundamental business. Companies like this that we believe in for the development of ecosystems in ASEAN,” he said.
Head of the OJK Non-Bank Financial Industry Supervision Department Bambang W Budiawan said Indonesian startups still face several challenges, especially at local venture capital companies. He hopes in this crisis period there will be local players who have new innovations so they can grow sustainably and contribute positively.
“The new normal condition on the other hand provides opportunities for those who have businesses supported by technology, especially in the health industry. Venture capital is expected to develop this type of business,” Bambang said.
At present, according to Bambang, there is a shift in the pattern of Indonesian venture capital funding to startups. Of the 99% in the form of productive financing, currently equity participation is 19%, productive breeding is 70%, and convertible bonds are 4%.
“The growth of the venture business shows the willingness of local venture capital. We are optimistic that the portion of equity participation will increase,” he said.
Some BRI Ventures Considerations in Funding Startup
PT BRI Ventura Investama explained that there were several factors that were considered by the company before investing in a digital startup or startup. BRI Ventures Chief Executive Officer (CEO) Nicko Widjaja explained the ASEAN digital market is getting more mature or mature, compared to the initial period in 2014.
“Digital landscape is currently in the survival ability stage so it must be sustainable, what is important for us is the startup business fundamentals, does it have added value and meet local needs,” he said in an online press conference on Wednesday (6/24/2020).
As an investment fund manager through the Venture Fund program, Nicko admitted that his party must be able to manage the risk of the funds that will be given to the startups. This risk management, according to him, is not only by looking at the company’s good corporate governance, but also the industry that is being carried out.
He gave an example, the lifestyle industry which is currently being hit by the Covid-19 pandemic, instead gave rise to a large-growth industry such as health, with an online trading platform of daily necessities.