MDI Ventures Investment Strategy for Foreign Startups

Today (04/7) MDI Ventures announced its funding for a management platform developer startup E-commerce from Singapore, Anchanto. This funding also adds to the long list of foreign companies invested through this Telkom Group venture capital company. Since January 2018, DailySocial reported that there have been 5 foreign companies that have received injections of funds through MDI Ventures, including among them poster (New Zealand), Whispr (Australia), Intelligence Elements (United States), and Roambee (California).

To scan what strategy is behind these actions, we interviewed the CEO & Investment Director of MDI Ventures, Nicko Widjaja. Starting the conversation, Nicko explained about the strategic mission of funding aimed at foreign startups. He emphasized that all invested startups would open their businesses in Indonesia, as well as strengthen the Telkom Group ecosystem in various business lines. For example, the most recent Anchanto will synergize with Metra Logistics.

But there are many out there who see that MDI Ventures is closely related to local startup funding. This is because Telkom itself is quite serious in empowering startups in Indonesia through its programs. Regarding the local startup ecosystem, Nicko explained that there is a synergy pattern that can be applied, to scaling up and product localization.

"Usually local startups in our portfolio work with outside portfolios, and it is possible that our external portfolio also invests in these local startups. For example, one of our IoT portfolios already has a market share in 9 countries. In Indonesia they saw one startup The local IoT invested by MDI Ventures understands the condition of Indonesia very well. Usually we meet to synergize. Besides the transfer of knowledge and technology what happens is that outside IoT startups get local wisdom from local IoT startups, and vice versa local IoT startups are brought in. scaling by outside IoT startups," explained Nicko.

Emphasized criteria

Although most of the foreign startups invested in have a B2B business model, Nicko explained that he did not rule out other business models, such as B2B2C or B2G though. Instead, he emphasized that the landscape deep tech which are priorities going forward, including for the category of digital enterprise, AI/deep learning, IoT, big data and so on. Strengthening non-startup ecosystem E-commerce and fintech started to come to the attention of MDI Ventures.

Regarding startup criteria, MDI Ventures requires two main aspects. The first is solid financial fundamentals. Then secondly, the startup business must be able to synergize with the units in the Telkom Group.

"However, we will not be as flexible as other investors whose criteria are more dominant to something that is 'intangible' (for example: founder, ideas, etc.). Financial fundamentals must be solid, this is what we have been studying for the last 4 years: cash-poor startup only results in poor collaboration. Because in the end they just become 'vendor' not 'founders'. We prefer startups to work on new market opportunities rather than working on projects that are vendor' explained Nico.

Apart from investing in foreign startups, MDI Ventures is also committed to continuing to make large investments in Indonesia. This year, it is certain that it will continue to invest in local startups, even with a larger portion.