The spread of COVID-19 has not affected the VC investment climate in Indonesia

In the midst of active plans for the formation of new managed funds and fundraising from internal and external Limited Partners (LP), a number of venture capital (VC) in Indonesia admitted that the emergence of the first case of the Corona virus (COVID-19) has not greatly affected its current investment agenda.

According to Kenneth Li, Head of Investor Relations & Capital Raising MDI Ventures, the impact will not be felt for the domestic investment climate. This year MDI Ventures is preparing two new managed funds and raising funds worth IDR 7 trillion.

However, said Kenneth, a number of MDI Ventures activities in Singapore have begun to be muted and carried out from home (work from home).

"But, fundraising from global may slow down somewhat due to access to air travel start hard. Luckily, we already want Close all, so it won't have too much impact on MDI Ventures," Kenneth told DailySocial.

VP of Investor Relations & Strategy at BRI Ventures, Markus Liman Rahardja, shares the same view. He also considered that the spread of COVID-19 had not had a big impact on the VC industry in Indonesia, but rather businesses that were directly related to consumers.

"Actually, that hard hits not us, but those who play on B2C, like OTA and hospitality. Well, the effect is so little. A little in us because meeting scheduled to be postponed. But, a lot of them [B2C business]," he said

Markus also said that until now there has not been a process that has been disrupted from applying for an entity formation permit in Singapore for BRI Ventures' new managed funds.

Meanwhile, IndoGen Capital Managing Partner Chandra Firmanto is more worried if people overreact to COVID-19 cases in Indonesia. This is because this can slow down various activities and the investment climate.

"Actually appetite and the [invested] fund exists. That's the most important. But it got delayed because closing could be later than the initial target," he said.

The threat of COVID-19 to the world's startup industry

A number of global companies have taken significant steps to avoid the risk of a wider spread of the Corona virus. As proclaimed CNN, JPMorgan Chase & Co asked 1.000 of its employees to work from home to test how it spreads.

Tech giants that "live" in Seattle, such as Amazon, Facebook, Google and Microsoft also do the same for all the workers. This follows one of the Facebook employees who tested positive for the Corona virus.

Those decisions pushed Google free premium Hangouts Meet service. This policy was in effect from last week until July 1, 2020. Google hopes this can make it easier for everyone to work from home.

Inevitably, the spread of COVID-19 in more than 90 countries has begun to have a domino effect on economic and business aspects in the world. One sector that is predicted to be affected is the startup industry.

In his writings published in Medium, VC giant Sequoia Capital warned that the spread of COVID-19 would have a turbulent effect on the business and investment climate in the world's startup industry. Sequoia even referred to COVID-19 as "The Black Swan in 2020".

"Because it is in a number of countries, we realized early on the effects of the corona on global business. Indeed there are businesses that will be positively affected by this, but a number of companies are experiencing difficulties along with the decline in activity, delays meeting Karena travel bans, and effect supply chain leaders due to lockdown in a number of factories in China," he explained.

Sequoia warned the entire startup ecosystem and its derivatives to rethink some aspects of its business this time of year. Some of these important aspects are management and capital expenditure, fundraising, sales prediction, adding employees, increasing productivity, to strategy marketing.

"While it may not be possible for your business to be directly affected by this case, you need to anticipate that consumers may change their minds spending habits them," according to Sequioa.