Central Capital Ventura Apply High Weight to Exploration of Startup Collaboration with BCA [UPDATED]

Central Capital Ventura (CCV), the investment arm of BCA, revealed that exploration of potential collaboration between its parent company and prospective startups to be funded now has a higher weight during due diligence. Relying on presentations containing market value predictions and valuations alone is now considered less credible.

In the BCA Mini Studio Discussion, at ICE BSD City, Friday (01/3), CCV Director Adi Prasetyo explained that this step had not actually changed from initial mandate for the establishment of CCV, namely as a supporter of BCA's main business in the financial industry.

"Maybe during this time VCs can see investment opportunities, so more or less the potential for collaboration will be explored. Maybe it's been like that all this time, we can't be like that anymore. This means that the potential for collaboration must be one of the factors that determines investment. Startups can come to CCV first and when we see the potential for collaboration and how good the technology is, we will definitely refer to BCA to see, due dilligence", how can the technology be relevant to BCA's needs, scalable, applicable, and so on," he said.

According to him, during due diligence a startup is actually the same as a bank assessing the potential of its prospective debtors, but the process is simpler. There are three things to do.

First, look at the team and management. Because, building a company culture is a matter of how human resources in the company grow steadily from tens to hundreds.

“When the team is small, building interactions between people is easy, but when it is big it is possible no? There's something finally founder "breakdown, that's what we want to avoid because the company's direction can change," he said.

Second, products and solutions. How as the company grows, its products remain relevant. Lastly, financial condition. Before the pandemic, startups were competing to present amazing valuations. Even though the calculation method is simple. "How long can BEP take, what is the strategy, that's what we're looking at now."

VP Digital Innovation Solution, Strategic Information Technology Group BCA Samuel Tjung added SYNRGY accelerator program which has been running since 2019 is a concrete form of BCA Group's support for the startup ecosystem. In fact, his party made BCA a sandbox to directly test the market, no longer assessing numbers in the lab.

He gave the example of one success story with a biometrics startup verihubs. This startup is one of the SYNRGY participants in 2020. The solution they offer is in line with BCA's needs because KYC is an important aspect in banking.

“BCA looks at the finished product fit with our needs. "Then we introduced it to CCV and finally got funding," said Samuel.

So that dreams come true sandbox running smoothly, now the accelerator program is custom made according to startup needs. No longer there batch which runs for three months, classes that need to be taken, discussions with mentors, and demo day. This change has been underway for two years.

He further explained that this program continues to evolve because it is trying to answer the needs of startups, so the methods and content continue to adapt. It's not just that startups need funding, there are also those that are looking for partners to collaborate with.

“It is made on a custom basis for each startup's needs. Example p2p loans, a suitable mentor will be sought. "We are also selecting whether there is potential for cooperation, this is what we are strengthening."

Now SYNRGY registration is open all year round and demo day will be held towards the end of the year. From six waves of implementation, SYNRGY Accelerator has graduated 79 startups out of more than 725 startups that registered and succeeded in creating more than 15 collaborations.

Aim for startups embedded fintech

Adi said that the decline in investment into startups from investors globally had reached its lowest point in the last six years. Specific to the fintech sector only, investment into the sector fintech over the last three years it has fallen by 30%.

Now, venture capital companies are more selective in providing capital. Nevertheless, he hopes that the situation will change following the emergence of a number of innovations from the latest technology as investor expectations continue to increase.

"It seems that in the first six months of 2024, investors will generally be more careful in looking at opportunities and making investments. On the other hand, there is actually a lot of money to be invested. Investors are waiting for the right opportunity to invest, but they are still being careful," added Adi.

Although he was not willing to go into further detail, Adi said that currently CCV is interested in technology-supporting solutions fintech (embedded fintech). However, this does not mean that the fintech sector is no longer attractive, but rather because it has matured.

"We as investors also hope that the valuation will increase so that we can get it return more quickly. But fintech still pleading. When it comes to expectations of rising valuations, for fintech still in the area consumer, like payments, online bankingand wealth management there is still a niche.”

Adi also said that apart from investing in new startups, his party would also balance it with divestment. There are no further details regarding this. It is also confirmed that CCV is not yet interested in adding to its startup portfolio p2p loans going forward.

According to CCV's financial report, throughout 2022 the total direct investment in shares by CCV will be 23 startups with a value of IDR 333 billion. Operating income amounted to IDR 41,1 billion, up from the previous year's IDR 2,88 billion. This increase occurred due to divestment from one of the portfolios, as well as unrealized gains on the fair value of the entire portfolio.

There are 25 portfolios under CCV, three of which have been exit, namely Railsr (formerly Railsbank), Wallex, and Impact Credit Solutions (ICS). Other portfolios include OY!, Qoala, AirWallex, Agate, Sinbad, Moduit, and Verihubs. There are three p2p lending startups too, such as Akseleran, KlikA2C, and Julo.

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Update 13/03/2024: We changed Adi Prasetyo's quote in the third paragraph