Dive into the DS/X Ventures Investment Hypothesis for Early Stage B2B Startups

Learning from the pandemic, it is appropriate for startups to return to their basic principles, namely focusing on building fundamentals, no longer pursuing exponential growth which is undoubtedly difficult to turn them into sustainable companies. It is this spirit that wants to be echoed again by DS/X Ventures, the investment arm of the group DailySocial.id.

The premise behind the birth of 'the youngest child' is to complete the startup ecosystem that has been built so far DailySocial.id. On its way, product DailySocial.id is medium online, research, then Startup.id (startup funding marketplace), and the incubator program to hackathon. The whole thing is part of the company's efforts to support the startup ecosystem in Indonesia from various sides.

"Meanwhile, what we have not done is support in the form of capital," explained DS/X Ventures Founding Partner Amir Karimuddin to DailySocial.id.

Amir Karimuddin and Rama Mamuaya are the two people behind the founding of DS/X Ventures which as a legal entity was founded late last year. Both simultaneously occupy important positions in DailySocial.id. On the one hand, Rama has previously invested in a number of startups (as Angel) with colleagues in the industry.

Even so, before settling into the world of VC, it was recommended that the two of them attend a short school organized by VC Lab, special accelerator fund managers.

While diving to drink water, they started studying at the VC Lab at the beginning of last year, while looking at the current situation considering that it was still uncertain. Not yet sustenance, the situation is getting worse until it happens winter startup, marked by a wave of layoffs at various startups.

"We had on hold for several months, until November [2022] began to receive commitments from super angels in our environment. Then our December launch."

There was optimism when launching the DS/X, that founder Early-stage startups still have opportunities to grow because Indonesia has many unresolved problems, even though at that time conditions were not good for a number of startup verticals.

"Timingits nothing better from now on. In public, the trust is not like a few years ago. But the chance to early stage the good one with a different mindset is precisely the time is now."

This condition is actually also experienced East Ventures in 2009. At that time, the world was being hit by a monetary crisis, the impact of which was also felt in Indonesia. Marked by the sharp decline in the JCI, pressure on the bond market, and the liquidity crisis in the banking sector.

"The condition is not good, in fact they make it fund and Eventually success until now. From our point of view, there is now a new wave of startups in Indonesia reality check from early stage there is no problem, there is still potential but it has mindset different."

Currently, DS/X is still rallying fund his first. The company has received a number of commitments from a number of super angel investors among startups. They trust the capabilities of Rama and Amir's experience, as well as their contribution so far to the Indonesian startup ecosystem through products DailySocial.id, whether it's news publications, digital platforms for startups, and so on.

"We had from the start network and Knowledge, even us first-time fund manager. So that's what we sell, how we view it that we always reflect in the editorial DailySocial.id, where is it going. They also understand that tech It will play an important role in the future."

Even so, he believes the optimism of investors from non-technology circles will increase in the future. According to him, at this time they tend to still wait and see.

Investment thesis

DS/X analyzes the prospects offered by the B2B business model so broadly because there is still a lot of homework. From the various reports that were summarized, it was conveyed that the market E-commerce Overall in Indonesia it is estimated to be worth $21,2 billion this year. It is projected to reach $104 billion, driven by a compound annual growth rate (CAGR) of 37,4%. The B2B segment represents 26,4% of the entire market e-commerce.

Furthermore, there was a shift in the trend from B2C to B2B E-commerce which provides opportunities for MSMEs to connect directly with business suppliers, overcome supply chain challenges and facilitate transparent pricing and faster logistics.

The solutions needed, starting from providing experience omnichannel seamless operation, optimizing supply chain processes, leveraging the potential of rural areas and micro-enterprises, and offering transparency and efficiency through B2B markets.

"Challenges in the B2B landscape include sourcing, delivery, and managing working capital, technology integration, security and privacy issues, regulatory compliance, currency volatility, and financial risk management," wrote DS/X thesis summary.

The context discussed is not limited to B2B solutions E-commerce only, but also includes other verticals that go into B2B solutions as their primary business model. Among them, SaaS, fintech, logistics, healthcare, cybersecurity, AI, HRIS, and climatetech.

What's more, Amir added, by focusing on B2B digitalization, these startups are more likely to survive longer. Remember, they've been thinking from day one how to monetize it. Now DS/X has eight startup portfolios, all of which are engaged in the B2B business model. Among them are Finfra, Cards, YOBO, Fazpass, D3 Labs, Baskit, and GoCement.

"For GoCement, we see it E-commerce B2B in general there is not much to docater by players from B2C and C2C. Market B2B is different, from merchantcustomers, and more specific solutions are needed. From several platforms such as GoCement, we see the solution, backgroundfounder-his, to market strategyit also fits, that's why we entered GoCement."

Apart from only playing on local and B2B startups, DS/X chose to be agnostic, meaning that it looked beyond the potential of the startup business vertical. Hence, in the DS/X portfolio there is D3 Labs which utilizes web3 technology in its solutions.

Rama explained, when looking at the long-term prospects of an industry, the metric looks at background capabilities founding team so the best form of control. D3 Labs itself was filled by the former Tokocrypto team before it was acquired by Binance. As a result, they learned many valuable lessons from there and continued their adventures at D3 Labs.

One of the first products D3 Labs is SeaSeed, a platform programmable money designed for technology-based businesses blockchain. The solution allows transactions real-time between companies and other related ecosystems, thereby reducing reconciliation costs as it eliminates intermediaries and enables transactions peer-to-peer.

"Blockchain is one way, so when people enter, they can't go back to the previous era because blockchain itu incredibly life changing. Now that people see blockchain it's NFT, crypto, just like people used to use the internet for fraud, now the technology itself is becoming vague, so I won't talk about the technology as the main selling point, but the platform itself," added Rama.

Other interesting examples were also found from Cards, a startup from Purwokerto. The business model is interesting because it is not certain that it will be successful if implemented in big cities. Cards is a digitization platform for managing Islamic boarding schools, starting from administration, managing pocket money, to finance in one system.

"With their limitations from the team tech and marketing, it turns out that they are able to produce a relatively business sustainable, but the month's performance is always positive. Can stay fit with the needs of Islamic boarding schools, even conservative businesses can convince going digital. we believe equal access regardless of gender, you can still get access to capital," added Amir.

It was revealed, at least until the end of this year it will be targeting two additional new startups to its portfolio.

Independence

Rama said, independence DailySocial.id as media will be maintained, not as a vehicle for DS/X to meet the needs of its portfolio. Moreover, according to him, DailySocial.id not just a media company online just. From the range of products offered outside the media, the ultimate goal is to help Indonesia's startup ecosystem grow.

"Media is one Arm what we develop from the front [since standing] because simply we can see value Information about startups is really needed and most of the mainstream media don't understand about startups."

One form of independence applied editorial DailySocial.id is to remain transparent by reporting on competitors from the DS/X portfolio. Unique, striking proposition of DailySocial.id as a group rather than VC, most of them build their VC business first, then build awareness through creation blogs, events, and podcast

"We are the opposite because we already have it all, that is the value we offer," concluded Rama.

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Disclosure: DS/X Ventures is part of the DailySocial.id group