Waiting for the New Generation of "Angel Investors" in Indonesia

The initial period of running a startup is crucial in all aspects. Introducing products to the market, validating business models, recruiting the right people, and maintaining reliable service are just a few of the examples. But in that initial phase, the funding factor is one of the most important. Talking about funding in the initial phase, it is mandatory to look at the role of angel investors there.

It can be said that angel investors are the investors with the greatest risk in the digital startup business cycle. Investing in a new startup means betting on the idea and potential of the startup as well as the ability of the founder. Often they even give trust when they have not seen the product. But this great risk carries the potential for comparable returns.

Interestingly, in Indonesia, the existence of angel investors still far from the spotlight. In fact, in the startup ecosystem, their existence is quite important. There is still much unknown about angel investors in Indonesia. We talked to some angel investors to know more about the domestic scene.

Still limited

Alexander Rush is one of the business people who is starting to become active as angel investors. After stepping down as head of Indosat Ooredoo, Alex immediately looked at digital business. Alex is listed as the founder of Digiasia and an investor in 11 other companies. He estimates there are several things that cause the name angel investors not really heard in Indonesia. Firstly, because many people are worried about failure in one startup. Another possibility, he suggests, is that they don't want to be "invaded" by unwanted people.

"Maybe they invested for various reasons, such as a special relationship with founder, happy with the industry, [or] just trying it out. It's a structure indeed angel investors in Indonesia it is not yet mature, especially for digital investing," said Alex.

MDI Ventures Venture Partner Aria Setiadharma confirmed the general environment angel investors in Indonesia it is still dominated by traditional investors. They are businessmen or members of conglomerate families or who have been involved in large industries in the country for a long time. According to Aria, with such a background, the ecosystem angel investors not developing as fast as in other countries such as Singapore for example.

Aria said that the presence of a digital giant's office in Singapore gave birth to a new generation of investors. Individuals who used to work at Google, Facebook, or Netflix created something like that venture funding to raise potential new startups.

"That cycle has not yet occurred in Indonesia. Most of those who have money still come from property, banking and mining. From there mindset"It's different," added Aria.

Sebastian Wijaya, who is familiar with the scene angel investing, acknowledged the level of difficulty new startups obtain funding from angel high enough. According to him, the main problem lies in the closeness factor of a person. He admits that getting investment from these individuals depends on the strength of connections to the right people.

This problem arises because of the platform or the body that manages it angel investing still quite small. You could say that the most well-known management entity in Indonesia so far only Wind.

"So for a startup to get angel investing it really depends on connecting to the right people. As far as I know, if this connection has been established, the success rate of the startup will increase funding quite big," said Sebastian.

Waiting for the new generation

Although in general angel investors Many still come from people who do not come from digital business, now a new wave is starting to emerge angel investors in Indonesia. These are executives and startup founders who try their luck by investing their money in new startups.

Report Deal Street Asia mentioned Kopi Kenangan CEO Edward Tirtanata, CEO Adrian Gunadi, and Koinworks founder Willy Arifin as examples that represent this new generation. In the report, it is known that Edward's daily activities are no longer filled with Kopi Kenangan, but also managing his investments in a number of startups, such as BukuKas, GudangAda, OtoKlix, and Klinik Pintar.

Apart from these names, there are also those who previously held leadership positions in large startups but have since left. Some names that are quite representative are: Ahmad Zaky and Rohan Monga.

"Now they want to try make money with investments in similar industries. That's also a category that is starting to grow. "Like unicorn startup founders who started investing in many startups too," said Alex responding to the emergence of a new generation of angel investors.

This new wave of investors certainly brings new enthusiasm to the digital business landscape. There are several reasons that encourage this condition. First they have relevant experience and knowledge in their startup. For new startups, the right guidance is like a compass needle to navigate various obstacles.

The next reason is that the networks that have been built by investors from professional circles and founders are usually quite mature. This can be additional capital for a startup that wants to hold a further round of funding. Apart from that, according to Aria, the character of investors from these circles is more patient with the development of the startup they are capitalizing on, considering that they need more trust in the founders in leading the company.

"During angel investors This still uses old thinking, it won't work for the ecosystem. Yes, but that doesn't mean nothing is okay. If angel investorsyou can get it here back seat, it's better for the startup itself," explained Aria.

The arrival of a new wave angel investors in Indonesia's digital business landscape does not mean it can solve all problems. Access to angel investors in Indonesia it is still relatively difficult. The existence of the organization angel investors, like the Wind, it is increasingly needed.

"We don't have many successful founders exit like in the US. We need to wait a few more years when there are more founders exit or IPO, definitely sound angel investors in public it will be heard more," concluded Sebastian.