MDI Ventures CEO Donald Wihardja Talks about New Managed Funds, "Exit", and Startup Synergies with SOEs

MDI Ventures (MDI), corporate venture capital owned by the Telkom Group, further increasing its business productivity. They announced the appointment of Fajrin Rasyid as chief commissioner and the disbursement of $500 million in new managed funds. In total, this CVC managed to book $790 million (equivalent to 11,6 trillion Rupiah) which became the largest CVC managed fund, not only in Indonesia but also in Southeast Asia.

Since operating in 2016, MDI has invested in 44 startups in 12 countries. Currently they also have business units operating in Singapore and the United States. With these efforts, many targets have been set. One of them is helping various SOEs maximize their digital transformation by utilizing the capabilities of competent fostered startups.

Donald Wihardja was appointed last May managing MDI Ventures. Together with his team, he formulated various strategic agendas to ensure the pace of Telkom's CVC "on-track".

Below is the interview DailySocial with Donald in full:

DailySocial: MDI Ventures currently manages $790 million, being the largest fund under management for venture capital in Indonesia today. How do you interpret this achievement?

Donald Wihardja: MDI Ventures was given this great opportunity because we have successfully managed the first $100 million in funding we received from Telkom since 2015. We succeeded in doubling fund This is not only in terms of valuation on paper, but also in the form of liquidity in some cases exit - good at private exit as well as IPOs – over the past few years. We also managed to give Rp. 1,6 trillion synergy/revenues to the Telkom Group.

But this is also a big task for MDI. With fund We were also asked to expand our cooperation or synergy targets, not only with the Telkom Group but with all state-owned companies. This is also a great opportunity for the startups that we foster, to help revolutionize BUMN in Indonesia, as well as improve the performance of these startups. The synergy that we always provide win-win for Telkom Group and startups.

Anyone limited partners who was involved in the $500 million funding round for MDI Ventures?

This $500 million fund only from PT Telkom. Fund MDI 500 is a continuation of Fund MDI 100 which we started in 2015. Our position is as corporate venture capital Telkom, so the LP is only Telkom.

MDI was also requested by Telkom and has successfully launched external funds others, for example Telkomsel Innovation Partner (co-GP with Telkomsel) and Centaurs (co-GP with KB from Korea). The aim is so that we or Telkom can have more funds to invest, while LP external You also get the opportunity to gain profits from increasing the value of the startups we foster, so win-win also.

In 2020, is there a specific target regarding how much investment will be poured into startups?

We have a very aggressive target to continue supporting startups in Indonesia, especially those that have succeeded in proving they can adapt during this Covid-19 era. In contrast to many large VCs who usually focus on global startups, we really believe in the big role of digital transformation in Indonesia and the big role of startups in supporting it. Therefore we prepare sufficient funds for them.

Of course, we remain careful in investing. We are ready to distribute sufficient funds depending on the existing opportunities and quality.

Many segments have proven successful in taking advantage of the opportunities that exist in this pandemic. E-commerce and food delivery really helps consumers get what they need, while still implementing health protocols. Healthtech managed to prove that Telemedicine very accepted in Indonesia. Lots fintech has also succeeded in navigating the difficulties of Covid-19 well.

The MDI 500 is targeted at later stagesinvestment (Series B and so on) in companies that have revenue strong, market fit which is proven, growth who are awake during this Covid era, and of course ready to collaborate together win-win with Telkom Group and BUMN.

Telkom Group also has several fund other in investment stages the earlier one. Indigo continues to be held to incubate startups. There are also fund targeting seed stages, Series A, and Series B. With this, Telkom Group through MDI continues to play a role in supporting startups from the initial to the final stages.

Last year, we noted that MDI Ventures succeeded in doing 5 exit. How are your views related exit for MDI Ventures? What's the strategy?

This year, we have also done several exit towards startups that we have invested in. Along with the emergence fund New MDI 500, currently we are more focused on pursuing synergy value between the startups we foster with the Telkom Group and BUMN in general.

In the midst of Covid-19, are there any adjustments to the investment thesis? How does MDI see the prospects and investment climate after the pandemic?

Covid-19 is The most powerful Chief Digital Transformation Officer in the world and in Indonesia. Because of this, there are actually many startups that are very worthy of investment. But many global VCs are not familiar enough and are therefore too afraid to invest in Indonesia. MDI as a local player really knows Indonesia and is confident about it growth in Indonesia, so we continue to invest but of course with caution.

What kind of strategy will MDI implement to help SOEs achieve their digital transformation goals?

The MDI 500 funds were given to us with the message that MDI must expand cooperation, which we have proven with Telkom, with all other BUMNs. We see this challenge as an opportunity, because with this, the Ministry of BUMN is also helping to open up pintu MDI to these BUMNs.

The initiative we are undertaking is in collaboration with several other state-owned CVCs in preparing solutions to support the businesses of several strategic BUMN cluster. Together we will support the digital transformation of BUMN using our startups.

Currently Telkom also has managed fund initiatives such as Centauri; even its subsidiaries also have their own CVCs like TMI. What is the position and role of MDI Ventures? What constitutes differentiation?

MDI's current role in the Telkom Group is to have a function “scouting”, “investing” and “build partnerships” between Telkom and startup (which already proven and established). MDI helps Telkom in managing the Indigo Incubator and Indigo Accelerator which focus on developing local startups in Indonesia seed stages. MDI also helps TMI in managing fund Telkomsel which will focus on supporting business synergies. MDI also opens up opportunities to manage third party funds outside the Telkom Group to strengthen the startup ecosystem in Indonesia.

How is MDI Ventures doing in Singapore and the United States?

MDI funds obtained from Telkom are managed using PT MDI in Indonesia. MDI Pte Ltd in Singapore is fund structure that we use for external funds we. Since most of our LPs are from outside, we use fund structure which is more suitable for their needs. We use MDI US to look for technology from startups in Silicon Valley that is suitable for the needs of Telkom and BUMN.