A Venture Capital founded by Bukalapak’s co-founder Achmad Zaky, Init-6, has just announced its latest investment of $5 million or around Rp72 billion to IDCloudHost, a local cloud service provider and data center.
In a virtual media presentation, Zaky revealed that IDCloudHost is his 11th portfolio after the venture capital was founded in April 2020.
“Since founded a year ago, we have observed around three thousand [startup] companies in Indonesia. We invested in IDCloudHost as we saw the cloud market grows rapidly. The products they offer are suitable for expanding into the Southeast Asian market,” he said.
Moreover, SME digitalization has increased rapidly during the Covid-19 pandemic, therefore, it is the right momentum for the cloud business. IDCloudHost is also targeting the SME market which is the pillar of the Indonesian economy.
On a general note, Init-6 was founded after Zaky resigned from his position as CEO of Bukalapak. Apart from Zaky, Bukalapak’s Co-Founder Nugroho Herucahyono also joined as a Partner at Init-6 after leaving his position as CTO. Init-6 is aiming for investment in the early stage, with Eduka edtech platform as its first portfolio.
Expand to Southeast Asia
This is IDCloudHost’s first funding during its five years of operation. Previously, companies relied on bootstrapping to grow their business.
IDCloudHost’s CEO, Alfian Pamungkas Sakawiguna revealed, this funding will be used for market expansion to Southeast Asia this year. With this target, his team is targeting one million users of its service next year.
Currently, IDCloudHost has served around 100 thousand customers, 350 thousand requests, and planted 5 data centers in Indonesia.
“We will continue to increase data center capacity in line with our expansion to Southeast Asia. We already have a data center in Singapore. In the future, we hope there will be an increase of up to ten times as much for SMEs using the cloud,” he said.
The local cloud computing-based web hosting market is quite competitive. Apart from IDCloudHost, there are dozens of other providers, for example in the micro-medium segment there are Niagahoster, IDWebHost, Masterweb, Exabytes, and so on. Meanwhile, in the upper-medium segment, there are players such as Biznet Gio, Telkom Sigma, and others.
Nevertheless, there are global players starting to mature businesses and build data centers in Indonesia, such as Amazon Web Services, Alibaba Cloud, and Microsoft Azure. In addition to the reliability and affordability, the value proposition of each service provider should be a priority in business strategy to be able to attract wider market interest.
Init-6 investment target in 2021
Furthermore, Zaky revealed that his team will continue to add new portfolios with a bottom-up approach this year. There is no specific target, but Init-6 remains committed to entering some business verticals, such as cloud, edtech, and fintech.
“Last year, we targeted [closing] 20 portfolios, but reached only ten. In fact, the investment cannot be forced, it may be because the pandemic started last year. This year, there could be more as we are getting more agnostic. There are many interesting sectors, fintech for example. Even though we are yet to score a portfolio, I think the future is good.”
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Original article is in Indonesian, translated by Kristin Siagian