Installer's Role in Supporting Impactful Startup Ecosystems in Indonesia

Impact investment or impact investing become a topic that also stands out in addition to sectors that have grown green since the pandemic took place. According to an article published by Schroders, Covid-19 has magnified the importance of impact investing in developing countries.

“As the world emerges from the pandemic, environmental and social issues are likely to gain greater focus. Better tools to analyze and monitor companies and their operations need a push that is in the hands of investors."

Globally, the size of the investment market impacted about $715 billion at the end of 2019, based on estimates from the Global Impact Investing Network (GIIN). The growth potential is significant and is likely to be driven by investor demand to align their value with their investment objectives.

At the heart of impact investing is the intention to generate social benefits, in combination with financial returns for shareholders and to measure impact.

In Indonesia itself, this segment was initially filled by philanthropists, activists, and non-profit organizations, until recently, investors began to notice. mainstream. One of which is Installer Indonesia, a company that focuses on providing capacity building activities for entrepreneurs and social businesses, which has been operating since 2014.

To DailySocial.id, CEO of Instellar Indonesia Romy Cahyadi explained that from year to year more and more social entrepreneurs or social enterprise emerge and develop. According to research published by the British Council in 2018, there are around 342 social entrepreneurs in Indonesia with a contribution to the country's GDP of 1,9%.

Meanwhile, quoting from other sources, such as those published by WIND entitled "Investing in Impact in Indonesia 2020", there is an increase in the investment side, both impact investors nor mainstream investors, to social entrepreneurs in Indonesia over the last few years. Number of social enterprises (SE) invested by impact investors increased to 31 investors during 2019-2020, and the number of SEs invested by mainstream investors was 19 attempts in the same year.

Departing from these findings, he believes that there will be more social entrepreneurs that will grow with the support of capital/investment not only from impact investors, but also mainstream investors. "In addition, startups in general will also increasingly consider/try to create a social impact through their business, even though the startup is not necessarily a company. social enterprise, "explained Romy.

He continued, “So there will be a kind of mainstreaming regarding social & environmental impact into the business practices of social entrepreneurship and/or startups in general. Mainstreaming this also happens on the side of investors. More and more investors will invest in social entrepreneurs or ordinary commercial businesses that create social or environmental impact. "

Installer Position

From the start, Installar has positioned itself as a catalyst, consultant and connector in the ecosystem social entrepreneur. There are three departments that carry out each of these roles. First, Enterprise Development (ED) which has several main programs aimed at developing a sustainable ecosystem (sustainable ecosystem) in Indonesia. As a catalyst, Installlar provides modules for incubation and acceleration programs.

“In each program, we try to understand the goals of each enterprise to support them with the implementation of programs that meet their needs. Through ED, Instellar created an Enterprise Development Program called Rise Inc or Rich and Impactful Social Enterprise Incubation, which is a 6-month incubation program that focuses on social enterprise early stage."

In addition, Instellar collaborates with corporations to create a CSR program that impactful and sustainable, and create horizontal synergies. Also, Installar became country implementing partnerr for several international organizations that have a concern for developing enterprise in Indonesia.

Second, Installar Impact Advisory (IIA) is a part of consulting services one on one, good for social enterprise or investors who are interested in impact investing. IIA also provides consulting services to CSOs such as non-profit organizations that need to develop business strategies for financial independence.

Lastly, Community and Partnership (CP) is tasked with building the Installlar community by collaborating with parties who have the same goals and ensuring that social entrepreneur get sustainable programs according to their business development needs. CP aims to build and maintain an entrepreneurial ecosystem and social impact businesses in order to continue to thrive and thrive.

I-SEA Program

It was further explained that in carrying out its role as a catalyst, Instellar held an incubation and acceleration program. There is a framework used, called the SEED Map, which was developed by Instellar to measure the development of social enterprises during the program. Not only that, Instellar also provides social enterprises with a Business Development Plan (BPD) to measure the impact on the beneficiaries.

“We also provide tailor-made programs by applying the Theory of Change (Theory of Change/Impact Model) for budding social enterprise entrepreneurs. Meanwhile, for those who have developed, the concept of measurement with the Social Investment Return (SROI/Return on Social Investment) is introduced.Social Return on Investment) or social business certification with the B Corp model.”

One of the latest acceleration programs currently being held by Instellar is the Instellar and IKEA Social Entrepreneurship Indonesia Accelerator (I-SEA). IKEA Social Entrepreneurship as a global initiative by IKEA, a home furnishings retailer based in Sweden, focuses on empowering social entrepreneurs from around the world. The objective of I-SEA is to invite social entrepreneurs to improve their social business in order to achieve the vision and mission of building a business in an equal and inclusive social environment, no longer Java-centric.

This activity focuses on social entrepreneurs who target social and environmental impacts outside Java, or who are currently operating in Java but have long-term plans to develop targeted affected areas outside Java.

Program registration This program has been open from 22 October 2021 to 10 December 2021. I-SEA will select 10 teams of social entrepreneurs with the best profiles based outside Java or having beneficiaries outside Java to be included in the program that lasts for two years.

Each team will have the opportunity to get a grant to help improve the quality of their business. This program itself consists of several stages, starting with recruitment, then the acceleration stage where participants are accompanied by consultants, including conducting a business needs assessment and facilitating them with a number of workshop.

This acceleration stage ends with event showcase, participants will present the results of what they have learned and practiced. At the end of the program, participants will be in the Growth and Impact Hack stage accompanied by a mentor to provide further support, including network expansion that will connect them with various actors in the ecosystem.

Assisted social entrepreneur

Romy continued, to date, more than 174 businesses have become alumni of the Instellar programs and have had an impact on more than 7000 beneficiaries spread across 18 provinces throughout Indonesia. The whole business is divided into nine sectors.

The largest percentage is held by creative, art, fashion & cultural (20,71%), agriculture and fisheries (15,71%), F&B (14,29%), education (12,14%), environment & sustainable energy (11,43%), health (5,71%), tourism (5%), infrastructure (3,57%), and lastly IoT, beauty & skincare (2,86%).

Meanwhile, when looking at business resilience, interestingly from a survey conducted by Instellar revealed that as many as 90% of businesses can survive. The main factor is because they managed to find a good business model and sustainable, so as to expand market and social impact and successfully address funding issues.

“Meanwhile, the remaining 10% did not survive because of two main reasons, namely not being able to find a business model that works sustainable and foundercontinue to study or work.”

According to Romy, so far the grants that have been disbursed by Instellar is $340 thousand (around 4,8 billion Rupiah). “Instellar does not manage fund specifically to be distributed to social entrepreneurs, but sometimes there are several partners who are indeed assisted to distribute financial support through us," concluded Romy.