The VC industry continues to grow in its significant way, as the Indonesian market still one of the most crowded in the Southeast Asia region. One of the contributors is Indogen Capital, a sector agnostic investor in Southeast Asia with deep operating experience in the Indonesian market.
In terms of resources, Indonesia is very attractive with all the dynamics in lifestyle and businesses. Indogen Capital, as a VC with family-business background experiences and powerful network, aims to be a value-adding partner for overseas VCs looking to grow in expand into the Southeast Asia market, particularly Indonesia. That is supposedly what makes them different from other VCs.
Indogen Capital’s Managing Partner, Chandra Firmanto said, “Indonesia becomes prime for the digital market, and we see that it’s getting aggressive. Most big players are not local, they didn’t have knowledge of our culture and habit. I see an opportunity for venture capital to help overseas VC to expand its portfolio.”
Investment focus and target
As a venture capital, profit becomes the ultimate goal. Although they claimed to be an industry-agnostic, Indogen Capital commits to investing only in hot sectors, such as fintech, lifestyle (including esports), logistics & e-commerce, AI & Blockchain, and Edutech.
“The metric is clear, there must be value in technology. Therefore, the financial institution needs your service
In terms of stage, Firmanto said the VC is specialized in pre-Series and Series A. They only target post-seed, not the seed level due to high-risk. However, he admits that the company has exceptions, particularly on the organizations that involved professionals or serial entrepreneurs.
The target has always been clear, it’s to exit, but the approach can be different. There are three ways of exit, shared by Indogen Capital’s Managing Partner. First, it’s from the IPO. In this case, there will be lockdown period [6 to 1 year] to fully exit. Second, exit through a major acquisition. This one is likely to happen and valuation is quite flexible based on demand. Third, is a secondary exit, where you can trade established shares to other VCs or investors.
“The secondary exit is very attractive, it is the reason why we have to build a good relationship among VCs,” Firmanto added
The portfolio story
Indogen Capital began operation in late 2016, it’s when the Managing Partner, Chandra Firmanto, has graduated from his family business and initiated something new with some friends. They started to invest in organizations since 2017 and managed to invest in 18 portfolios today, including the leading car trading platform in Southeast Asia, Carsome, and the online marketplace of local Islamic fashion designers’ products in Indonesia, Hijup. The latest one is a short-term rental and property management platform, Travelio.
Among the 18 portfolios, three have exited. The first one is Spacemob which acquired by WeWork in 2017. Second, they exited from Clearbridge Health by IPO on the Singapore Stock Exchange. Last but not least, AINO, a payment solution for transportation and government sectors in Indonesia which partially acquired by TIS Corp.
“VC is indeed a competition. However, when we have added value, it may turn into collaboration. In this case, we have powerful networking and willingness to hands-on,” Firmanto said.
Behind the success stories, there must be lessons learned. In this case, Indogen Capital happened to experience not-so-good investment to one of the on-demand housekeeping and laundry services in Indonesia. It’s a complicated issue concerning future plans. At that time, we simplify our exit scheme and too focused on small matters.
“One thing I learn, the most important is to confirm with the players whether they demand to have certain services in their ecosystem,” Firmanto said.
Fundraising terms
Indogen Capital has closed its first fund at US$10 million with only local LPs involved and already 80% deployed. Currently, they are aiming for US$50 million second fund, soon to close the first US$10 billion from global networks, such as Hongkong, Taiwan, South Korea, and Japan. Regarding the rest billion, Firmanto said the team has reserved space for big corporations from other countries.
Every startup has a different kind of special needs, Indogen Capital tries to accommodate all these through the right investors. That is the reason behind their first fund involved only the local LPs. This is what becomes their strong point. The investors come from not only Java Island but all over Indonesia.
“You cannot be the investment partner for Indonesia if you can only support Java,” Firmanto said.
Regarding ticket size, they set around 200-500 thousand at the first fund. “We’re not even a threat to other VCs. It’s rather an advantage than a disadvantage,” Firmanto continued.
It is said that they have consistently exceeded their annual investment return target of thirty percent year-on-year. The team is very aggressive, they even set a target for 3-5 return in 7 years.