MUFG Allocates 1,5 Trillion Rupiah for Startup Investment in Indonesia

Mitsubishi UFJ Financial Group Inc (MUFG) through its subsidiary MUFG Bank Ltd and MUFG Innovation Partners Co Ltd (MUIP) formed a managed fund called Garuda Fund with an allocation of $100 million or around 1,5 trillion Rupiah.

In its official statement, MUFG collaborated with PT Bank Danamon Indonesia Tbk (IDX: BDMN) to form the Garuda Fund or MUFG Innovation Partners Garuda No. 1 Limited Investment Partnerships.

Garuda Fund will focus on investment in Indonesia which is also said to represent digital economic growth in the Southeast Asian region. The investment target is startups that will synergize with Bank Danamon.

Kenichi Yamato, Managing Executive Officer and Chief Executive of Global Commercial Banking Business Unit at MUFG Bank, said that MUFG is trying to meet the financial needs of the Indonesian people from various sides, as well as contribute to domestic financial inclusion.

"Garuda Fund enables MUFG and Danamon to collaborate with Indonesian startups to strengthen product offerings, open access to diverse customers, and encourage digitalization so that they can better serve a wider spectrum of customers," he said.

Previously, MUIP was established as a company funds management in 2019 with the aim of strengthening the transfer of innovation through business alliances between all companies in the MUFG Group and startups located in Japan and other countries.

Garuda Fund is the third MUIP managed fund. So far, MUIP has invested 40 billion Yen in various companies on a global scale. This collaboration is Bank Danamon's strategy to increase the competitiveness of digital products and acquire new customers.

Bank Danamon Indonesia's Chief Strategy Officer Reza Iskandar Sardjono added, "Garuda Fund is intended for strategic investment in Indonesia's dynamic and competitive digital finance sector, with an emphasis on startups developing digital financial and fintech platforms with qualified scale and digital capabilities, in order to expand the collaboration ecosystem Danamon."

MUIP as General Partner has an investment ratio of 0,1%, while MUFG Bank and Bank Danamon as Limited Partners contribute 89,9% and 10% respectively.

Previously MUFG injected an investment of $ 200 million or IDR 3 trillion to Akulaku. This investment is agreed in kind financing to support growth Akulaku in Southeast Asia, especially Indonesia.

Bank Danamon, part of the MUFG group, is a BUKU 4 bank that offers financial services to various segments, from consumers, MSMEs, enterprises, to automotive financing.

Based on e-Conomy SEA report, the value of the digital economy in Indonesia is estimated to reach $77 billion or more than Rp.1100 trillion in 2022. This figure represents a 22% increase compared to the previous year.