Chandra Tjan: Digital Ecosystem in Indonesia is Not Mature, Opportunity for Investors and Startups

Alpha JWC Ventures is one of the most active venture capitalists in Indonesia. In 2020, they invested in 10 startups. This number adds to the list of portfolio companies to 41. In 2021, they plan to close fund all three are claimed to have a larger nominal so they can maneuver more aggressively in the Indonesian startup landscape.

To explore the vision and goals of Alpha JWC Ventures, we had the opportunity to conduct an exclusive interview with one of the founder them, Chandra Tjan. In the ecosystem, he is not new because in 2009 he was the Co-Founder & Managing Partner of East Ventures in his Fund 1. His involvement included initial investments in Tokopedia, Traveloka, Disdus (acquired by Groupon), Pricearena (acquired by Yello Mobile), and several others.

"In 2009, at that time I had lived in Singapore for 10 years and settle down and a career as a banker at Credit Suisse and Citigroup. There, I saw the enormous potential and opportunities of the technology sector in other countries such as America, Japan, and China. I think Indonesia should be able to do that too. Technology and social impactsIt will advance Indonesia, and I want to play a role in that process," he said.

He continued, "It turns out, at that time in Indonesia there were already several technology/startup companies, but they did not have the ability to attract funds from foreign investors to grow bigger. Seeing this need, I returned to Indonesia to focus on this technology sector. Together with several partner, I founded East Ventures and became Managing Partner at fund his first. I am also the only East Ventures Partner full-time and focus on Indonesia [at that time]."

Then in 2015, together with two colleagues Jefrey Joe and Will Ongkowidjaja, Chandra founded Alpha JWC Ventures. So far, there are two fund which is managed with a value of almost $200 million or the equivalent of 2,7 trillion Rupiah. These funds were recorded from LPs originating from Indonesia, Singapore, the United States, several European countries, Japan, China and Korea. Every year, they have a target of investing in 8-10 startups with the main focus being early stage funding. However, it is not uncommon for Alpha JWC Ventures to also be involved follow on investment for series B. Ticket sizes awarded ranges from $200 thousand to $15 million.

"In 2013, there were differences in vision at East Ventures and finally in 2015 I, Jeffrey and Will, founded Alpha JWC Ventures. The approach we took was quite different from investors in Southeast Asia, even today. Alpha JWC was founded as fund which is independent and institutional. With strict discipline in investment strategy so that every decision can be accounted for in the future. From previous experiences, I also learned the importance of mentoring founder in the early days of a startup, that's why at Alpha JWC we apply the approach value-add approach and team building value-creation the big one," explained Chandra.

The digital ecosystem is not yet mature

Although currently Indonesia already has decacorns, unicorns, and dozens centaur across a variety of business landscapesAccording to Chandra, the digital ecosystem in Indonesia is still not yet mature - even though it is starting to take shape. There are several indications of the maturity of a digital startup ecosystem, including competition between players will become tighter, the market will become saturated, and it is difficult for companies to grow exponentially.

"Indeed, it is becoming more established, but it is still far from mature. Indonesia's digital industry is still young, and this is good news for us as investors and startups. This means that the market potential is still enormous to be discovered and developed, and projections growth still very large in almost all sectors and target markets. "These are very interesting times for Indonesia," said Chandra.

These conditions made Alpha JWC Ventures choose to adopt this view sector-agnostic. They invest in various business ideas in various sectors that are estimated to have great growth potential and have a positive impact on society.

"In investing, we always look at 3 factors: people, products, and potential --- quality founder who built the startup, the product that provides a solution to a real problem that many people need, and the potential for the product to develop in terms of features and users. Of the three, quality founder is the most important factor in our consideration, because ideas and products can change in the early stages, only founder whose commitment and vision we can uphold," he explained.

In 2020 the startup ecosystem was faced with the Covid-19 pandemic. There are many adjustments that must be made by startup players and investors. Chandra himself, on the one hand, sees that the pandemic has succeeded in forcing investors to pay more attention fundamentals and economic units in startups -- something that's been in place since the beginning at Alpha JWC Ventures. On the other hand, the pandemic has accelerated digital adoption in Indonesia, so that it will be easier for startups to introduce their products to the public.

"For us, digital adoption The higher the investment potential, the higher the investment potential, so this is the right time to invest. However, you have to be selective, including whether these startups can survive and develop even though they are facing a pandemic. Since the beginning of the year, we have continued to actively invest in new companies and follow-on investment to our portfolio, and to date we are satisfied with the results," explained Chandra.

Strategy exit

To date, Alpha JWC Ventures has done so exit in 3 of its portfolios through acquisitions. Exit, through M&A or IPO, is indeed one way for venture capitalists to get ROI from what they have invested. They will profit from an increase in valuation value, based on the growth of the related startup.

Related Strategy exit, Chandra said that currently their focus is on becoming a long-term partner for his portfolio. "Exit Of course it's important, but it makes exit as the main focus it will actually damage the dynamics with the portfolio. We will exit at the right time, and 'right' means something different to every startup."

He added, “So far, we have succeeded exit of the 3 startups, Spacemob was acquired by WeWork less than a year from our investment; DealStreetAsia was acquired by Nikkei to realize their vision of bringing quality news from Asia to the world; and Jualo was acquired by another of our portfolio, Carro, as an expansion route in Indonesia. All three happened at the right moment and we are proud of these achievements.”

Projections of Indonesia's digital ecosystem

Chandra also revealed that it is important for investors to read future trends or even create trends themselves. "In 2010, for example, I saw E-commerce will become an 'idol' in society which at that time is starting to become familiar with fast and cheap internet connections. I started with Tokopedia and Traveloka. Then, 6 years ago, when we started Alpha JWC, we saw that people who were becoming comfortable with several daily digital applications would definitely need a more practical payment method and an affordable source of funds, that's why we started investing in several startups fintech as Kredivo and My Capital. "Both of them have now become one of the biggest players in Indonesia and part of people's daily lives."

He further added, "Likewise with trends new retail in the F&B sector. In 2018, we saw that technology could provide convenience for startups and consumers, therefore we made a large investment in Kopi Kenangan. This investment was considered crazy by many people at the time. But, now, we can prove that not only did we make the right choice, but we brought the trend of VC funding to food startups -- something that was previously unthinkable in Indonesia. Always one step ahead, that's the key."

Regarding the startup ecosystem itself, he believes that Indonesia is approaching it "inflection point". The ecosystem has started to rise 10 years ago, then accelerated in the last 5 years; It is believed that soon after the pandemic ends, development will accelerate both in terms of quality, innovation, quantity of startups and cooperation between players.

Alpha JWC Ventures itself also has plans to expand its business in Southeast Asia. "After Indonesia, Singapore and Malaysia, we believe Vietnam will be digital hotspots next in South East Asia. The startup ecosystem in Vietnam is also similar to Indonesia, only a little younger, that's why we are interested there."

Then regarding expansion for his startup portfolio, Chandra believes that each portfolio has its own focus, and regional expansion is not always the best, especially with the Indonesian market being very large and still able to be explored further. "There are several of our startups that will expand regionally in the near future, but at the moment I can't tell you much," concluded Chandra.