Canceling CVC Establishment, BTN Invites Mandiri Capital to Form IDR 400 Billion Management Fund Specifically for Proptech
Currently the licensing process for managed funds is still awaiting OJK approval
Bank Tabungan Negara (BTN) collaborates with Mandiri Capital Indonesia (MCI) to form a special managed fund for funding startups in the field of mortgage and proptech. Currently the licensing process for these managed funds is still awaiting OJK approval.
BTN is the sole investor for this BTN Fund and has prepared investment funds ranging from IDR 200 billion to IDR 400 billion. BTN will enter various stages of investment for startups that have business in Indonesia and are engaged in proptech, mortgage tech, fintech, embedded finance, construction tech, open finance, SaaS, and other strategic sectors that are in line with their main business.
“In BTN's vision it becomes The Best Mortgage Bank in Southeast Asia, one of the initiatives is how we develop businesses that support the housing sector. ASEAN mortgage is very prospective and for go digital in area mortgage, digital payments, and we can't get the ecosystem grow organically. So it needs to accelerate through partnerships," said Bank BTN Risk Management Director Setiyo Wibowo at the inauguration of the collaboration between BTN and MCI in Jakarta, Wednesday (6/12).
According to Setyo, licensing from the OJK usually takes between three and six months. If there are no obstacles, investment in startups will begin after obtaining permission. The plan is for the managed funds, BTN and MCI will inject 10-20 startups. "The most important thing is that startups have operations in Indonesia," he added.
In assessing potential portfolios, BTN will look at prospects, business models and unique solutions offered by startups, in line with BTN's business. Not only investment, the startup will be able to integrate its services from BTN, both in terms of transactions, sales channels, and acceleration of business processes.
“After that, we will see the person [founder] and see how chemistry-his. So we don't have to look at whether the startup is profitable or not."
MCI Investment Director Dennis Pratistha said that the BTN Fund can bridge BTN's needs for digital transformation in the company, as well as a form of participation in the ecosystem mortage and proptech in a bigger way. "BTN can increase NIM, fee-based incomeand cost efficiency and improvement. "BTN will be a strategic investor for startups that are considered to be able to provide added value," added Dennis.
At Mandiri Group, for example, MCI invested in a POS developer startup iSeller in 2020. At that time, iSeller had attracted 19 thousand merchants. The growth is significant until at the beginning of this year, the number of merchants rose to 35 thousand. A partnership was also established with Bank Mandiri for the Livin' Merchant program, until finally the number of merchants increased to 1,2 million to date.
On the same occasion, Setyo also confirmed that BTN had canceled its establishment corporate venture capital (CVC) itself. The reason is because after reviewing it, the quickest and most sensible option to operate immediately is to form a managed fund with partners.
"If getting a VC permit is more difficult, it also needs to be supported by talent who are specialists in this area. After-review, the least risk and impact positive, it's better for BTN in the end by making it fund. "
Previously, BTN's discourse to form venture capital had been going on for several years. Candidate to be acquired Sarana Papua Ventura is a subsidiary of PT Bahana Artha Ventura, which is a subsidiary of PT Bahana Pembinaan Usaha Indonesia (Persero).
This plan even received approval from BTN EGMS shareholders in August 2019.