MDI Ventures and Bio Farma Form a Management Fund for Biotech Startups
MDI Ventures and Bio Farma formed a new managed fund “Bio Health Fund” of $20 million or around 292 billion Rupiah. Through this managed fund, both of them are targeting early and growth-stage startup investments that focus on biotech and health services in Indonesia.
In its official statement, the Bio-Health Fund is targeted to provide synergy to Bio Farma as one of the main LPs. At the same time, it opens up opportunities to increase Bio Farma’s capabilities in the field of end-to-end biotech research and health services.
“Currently the health industry in Indonesia has various challenges, including how to develop new technologies related to bio science, pharmacy, and healthtech. This is the reason for the Ministry of SOEs, through Bio Farma, Kimia Farma, and Indofarma, to invest in technology with MDI Ventures,” said Deputy SOE Minister I Pahala Nugraha Mansury.
Meanwhile, President Director of Bio Farma Honesti Basyir revealed, Bio Farma has strong values with its position as a pharmaceutical manufacturer and health service provider. This will provide added value for biotech startups to go-to-market.
“The Bio-Health Fund does not limit the geographic focus of its investment, it is open to products and solutions that can contribute and provide added value to the health care provider sector in Indonesia,” added Honesti.
For information, Bio Farma is a subsidiary of a pharmaceutical BUMN that is engaged in end-to-end health, including R&D, manufacturing, distribution, to retail pharmacies, clinics, and clinical labs. Bio Farma is said to be the only human vaccine producer in Indonesia and the largest in Southeast Asia.
Meanwhile, MDI Ventures is an extension of Telkom Group investment. Its total portfolio reaches 64, of which three are healthtech startups, namely Alodokter, mClinica. and Heals.
In addition to vaccines and serums, Bio Farma will add to its product portfolio by innovating with startups to produce diagnostic kits in the form of mBio-Cov and Biosaliva.
“This is part of innovation for life science and healthtech products as our ultimate goal to form a national health ecosystem,” added Honesti.
Meanwhile, MDI Ventures COO & Risk Management Sandhy Widyasthan said biotech had the potential to transform not only the health sector, but also agriculture and manufacturing in Indonesia.
“Over the past two years, MDI has invested in the health sector and biotech investments with advice from Bio Farma. We see biotech as the next frontier in mature technology for faster expansion,” he said.
Biotech or biotechnology is defined as the process of utilizing parts of living things to produce products in the form of goods or services that are beneficial to humans. Biotechnology can be applied to the manufacture of food, waste treatment, to produce seeds and plant production.
Biotech in Indonesia
Treasurer of the Indonesian Venture Capital and Startup Association (Amvesindo) Edward Ismawan Chamdani assessed that biotech startups have not been able to grow optimally in Indonesia due to a number of factors, such as complex regulations and lack of competitors.
The average biotech player is held by large companies and conglomerates. Meanwhile, research-based startups take longer to go-to market due to lack of funding and lack of certainty of income.
According to Jakarta State University (UNJ) Innovation Center and Business Incubator Coordinator Dianta Sebayang, the potential for growth of biotech startups is quite large as long as it is balanced with government support to build the required ecosystem, including the readiness of human resources.
“Biotechnology startups are companies that need reliable human resources not only digitally, but also in multi technology, medicine, chemistry, biology, nanotechnology, and others. So far the focus in Indonesia is still more on digital talent for service needs,” he said.