MDI Ventures Continues to be Strengthened, CVC Strategy is More Relevant for Digital Transformation

Last week, on Friday (14/8), Telkom Group President Director Ririek Adriansyah announced the appointment of Fajrin Rasyid as President Commissioner of MDI Ventures. Fajrin will also be an advisor Centauri Fund. Previously, it was known that the former President of Bukalapak had occupied the position of Director of Digital Business company as of June 2020.

Fajrin's appointment was based on his experience working in the Indonesian startup ecosystem. At the same time, it is expected to be a strategic effort for the company to achieve digital transformation as a whole, in order to expand the potential of digital revenue.

"Telkom is projecting a significant increase in its digital revenue in the next few years. However, to date, only about 10 percent of the company's revenue has come from digital businesses. With the help of MDI Ventures, my mission is to build tangible synergies and make revenue contributions increase by sharp," said Fajrin

Leadership success corporate venture capital Telkom's actually also not long ago. Last May 2020 Donald Wihardja entered occupy the position of CEO, replacing Nicko Widjaja who had moved to work on BRI Ventures.

Besides Fajrin, Yusuf Wibisono was also appointed as Commissioner of MDI Ventures. Currently he serves as VP Strategic Investment Department Telkom Group.

Boost investment, increase assets

At the same time, MDI Ventures also announced the acquisition of new investment funds worth $500 million or equivalent to 7,3 trillion Rupiah. So that the total assets under management that have been recorded have reached $790 million or the equivalent of 11,6 trillion Rupiah.

The funds will be invested in technology startups that have a special focus on the Indonesian market. This includes collaboration with SOEs in Indonesia.

"To maintain a strong foothold in the market going forward, Indonesian SOEs understand that they must adopt digital business models more deeply than ever before. By allocating these funds in line with the government's digital transformation mission, and by partnering directly with local technology innovators, SOEs Indonesia is positioning itself to continue to grow," said CEO of MDI Ventures, Donald Wihardja.

It was noted that since 2016, MDI has invested in 44 startups from 12 countries. In 2019, they managed to record "Exit" five times through M&A and IPO by its portfolio.

CVC strategy is getting more relevant

In the report DSResearch titled "Corporate Digital Transformation 2020” stated the various strategies adopted by companies in Indonesia in fostering a culture of innovation in their environment. It also describes how the Telkom Group orchestrates internal and external innovations to carry out the process ideation, incubation, and value in order to produce products/services that are continuously relevant to the market share.

Within this framework, it is clear that MDI has an important role to bridge what is outside with what is needed internally in the business. As a CVC, he also plays a role in capturing strategic synergies opportunities that exist outside, both from within and outside the country. Because after all, if you rely on the internal side, there are many aspects that limit the space for movement. This was stated by EVP Digital and Next Business Telkom Joddy Hernady.

He said, “Now R&D alone is not enough because there are more innovations and new products, it is also multi-disciplinary. That's why startups need to have three capabilities, namely people who understand technical, design, and business. Getting here, we have to open innovation, we also have to invite ideas from outside, not enough from within."

Joddy also mentioned that the innovation journey as shown in the chart was not formulated instantly. His journey since 2013 and continues to grow with new theses according to the needs of the company.

Not only Telkom, the success of CVC as a vehicle for digital transformation is also expected by various other companies in Indonesia. Through their respective venture units, the companies hope to open up opportunities for synergies with startups that are able to democratize the existing business landscape.