Acara NXC International Summit 2022 (Nexticorn) yang akan digelar di Bali pada Agustus-September 2022 mendatang diharapkan bisa menjadi ajang bertemunya startup berkualitas dengan venture capital lokal dan asing. Untuk memastikan acara tersebut bisa memberikan impact yang positif bagi kedua belah pihak, pihak penyelenggara memastikan proses kurasi startup dan siapa saja VC yang hadir dilakukan secara tepat.
Menurut Chairman Nexticorn Foundation Rudiantara, yang bisa hadir di acara tersebut adalah pendiri startup dan jajaran C-Level. Sementara dari sisi pemodal ventura, mereka yang masuk kategori Principal dan Partner saja yang bakal mengikuti acara ini.
Tercatat ada 26 startup yang masuk ke putaran pendanaan Seri A ke atas yang hadir di acara tersebut, di antaranya Wahyoo, Noice, Ritase, Crowde, Dagangan, Hangry, Investree, dan HappyFresh. Pihak penyelenggara masih melakukan kurasi ke sekitar 130 startup untuk bisa mengikuti acara ini.
Dari sisi venture capital, dipastikan 16 VC sudah mendaftarkan diri. Di antaranya adalah Alpha JWC Ventures, Sequoia, 1982 Ventures, Vertex Ventures, Softbank, Insignia Ventures Partners, Temasek, Openspace Ventures ,dan Beenext.
“Meskipun bertemakan web3 yang harapannya bisa menjadi pemicu lebih banyak lagi startup yang menghadirkan layanan dan teknologi web3 untuk bisa menjadi startup unicorn selanjutnya, tidak menutup kemungkinan mereka yang masuuk dalam kategori startup web2 juga bisa ikut hadir bertemu langsung dengan calon investor potensial,” kata Rudiantara.
Disinggung seperti hasil gelaran acara Nexticorn sebelumnya bagi pendanaan startup dan minat investor yang bergabung, Edward Ismawan Chamdani, salah satu Committee Nexticorn dan Co-Founder & Managing Director Gayo Capital mengungkapkan, acara sebelumnya masih berada di naungan yayasan.
Tahun ini, ketika Nexticorn sudah menjadi sebuah PT, akan dipastikan adanya laporan dan hasil rangkuman usai acara. Siapa saja startup yang berhasil melakukan meetup dengan investor dan seperti apa tindak lanjutnya. Hal ini akan menjadi catatan penting bagi pihak penyelenggara.
“Dengan mengedepankan web3, harapannya Indonesia tidak hanya menjadi konsumen, tetapi juga sebagai produsen yang bisa menghasilkan gaming berkualitas. Salah satu caranya adalah mendukung game developer lokal yang sudah mulai menerapkan teknologi web3 saat ini,” kata Edward.
Proses kurasi startup
Menurut salah satu pendukung acara, DR David Rimbo dari Ernst & Young Indonesia, proses kurasi ketat dilakukan untuk memastikan startup yang diundang memang telah mengalami pertumbuhan yang positif dan sedang dalam proses scale up.
Untuk memastikan proses matchmaking yang akurat, pihak Ernst & Young Indonesia juga mengolah data dan informasi yang diberikan masing-masing startup secara mendalam.
“Masing-masing startup memiliki business model dan competitive advantage. Untuk itu kami membuat struktur sehingga kami bisa mengambil dan mengolah data dengan melakukan analisis, tanpa mengurangi nilai atau value dari masing-masing startup,” kata David.
Menurut David, meskipun banyak startup kini berada di masa-masa sulit, hal ini tidak mengganggu gelaran acara Nexticorn. Dirinya melihat proses yang serba sulit saat ini membuat startup semakin matang dan tumbuh secara positif. Di sisi lain, kondisi ini juga menjadi ajang pembuktian, siapa saja startup Indoensia yang berhasil menjadi lebih unggul.
Mengusung tema “Decentralizing The Future of Internet”, acara Nexticorn kali ini akan mengedepankan experience ekosistem teknologi tanah air bagi para partisipan.
Acara ini turut didukung Amvesindo, Asosiasi Fintech Indonesia, Ernst & Young Indonesia, Ideosource, DailySocial.id, Kadin Indonesia, dan G20 Indonesia 2022.
This article is a part of DailySocial’s Mastermind Series, featuring innovators and leaders in Indonesia’s tech industry sharing their stories and point of view.
Edward Ismawan Chamdani started his journey in the tech industry through the best-known computer company in the world. For years, he had his shared interest in the financial sector and finally started his own software company. With a decade-long experience in the industry and one of the perks of being an analyst, he builds a fine network within the startup and investment scene.
In partnership with Andi S. Boediman, Ideosource was built from brick to brick. Now it is expanding beyond just a VC. His other initiative, Gayo Capital, partnered with Ishara Yusdian and Jefri Sirait focuses on revenue-generating companies whose businesses organically create impact to the world. Recently, he also started a venture builder named Starcamp Asia aiming to bridge the founder’s gap in the country.
Edward has a personal purpose to unlock the ultimate potential of Indonesia sustainably from various aspects mainly in leveraging human capital surplus and abundant natural resources via technology disruption and implementation. In order to achieve this mission, he encourages people to be more invested in the core issues, it is upstream investment.
Indonesia is the tech paradise of Asia, where technologically enabled startups can find fertile soil to grow and deliver impactful contributions to the developing nation’s problems. The President himself has announced the Nation’s Vision To be the Digital Energy of ASIA. An achievable vision as Indonesia has been the biggest economy in Southeast Asia, 8th biggest in the world, and in the middle of a massive digital transformation changing its young population from a nation of workers into digital-savvy talent taking over the world, one unicorn at a time.
Starting with mechanical engineering, grasping some financial background, and accidentally creating a VC, Edward has been learning during the process. He is currently serving as Managing Partner at Ideosource Venture Capital, Gayo Capital, and StarCamp – with a mission to incubate, invest and accelerate with a “Purpose”.
DailySocial is glad to have such an insightful and passionate discussion of Edward’s biggest dream to unlock Indonesia’s ultimate potential. Below is an excerpt of the conversation.
What do you think of Indonesia’s investment ecosystem nowadays?
It was early 2011 when we first started Ideosource, startup quality was quite green. There are limited sources for mentors, and events, let alone VCs, we’re all still learning. Every time we find startups with a legitimate business model, it’s still not clear how the investment process should be carried out. Years passed by and we finally see a sweet spot around 2014-2015, turns out our investment was fruitful.
Over time, Indonesia’s startup ecosystem is getting mature and one by one reached unicorn status. Rudiantara, who at that time still leading Indonesia’s Communication and Informatics Ministry, initiated the leaders of these tech giants to meet with global investors, and the progress is superb. Indonesia is getting broadened and better exposure in the global tech scene. In 2018, was held the first Nexticorn (Next Indonesian Unicorn) with a vision to step up the game for Indonesia’s startup scene.
Indonesia’s list of unicorns in the first quarter of 2022
Observing the startup scene in the last few months regarding the global meltdown, it is still very promising. In fact, this is the right time for them to start fundraising due to the projection of investment decline in 1-2 years ahead, especially for heavily impacted VCs with big-level funding. However, in general, it will not affect the whole ecosystem we still have a great potential growth story. Our market share remains huge in several sectors, including commerce, fintech, and edtech.
The most interesting is in healthtech. Previously, we have substantial issues with online prescriptions and Electronic Medical Records. Under the supervision of a tech-literate figure, there are more policies that support tech accessibility and adoption. The presence of the Peduli Lindungi app, telemedicine service, and government collaborations with healthtech companies are proven effective during this pandemic.
In addition, there are many other sectors yet to optimize, including forwarding, logistics, cross border trading. In terms of natural resources from agriculture to human capital. There are huge potential lies in B2B while people are focusing on B2C.
The thing is, most investments are engaged in the downstream sectors instead of the upstream side due to market availability and accessibility. Upstream investments may take extra effort as it is aimed at the root causes that are often identified by determining the most immediate and direct causes and working backward from there. In many cases, upstream action addresses social, economic and environmental conditions.
Ideosource grasps the experience of investing in the upstream sector with eFishery. It is resulting in the shifting of the whole value chain, from the unbankable to bankable fish farmers through thoroughly distributed information. This is the kind of ecosystem that will drive the whole sector. As it extends the business and continues to the processing level, it will lead to export and import and ends up in the country’s exchange.
It is not about the downstream sector did not have an impact, it is only limited to the additional income for the players. When we focus on the producers, we can use local resources for the country’s economic resilience. I think VCs should consider this investment angle.
You have a background in mechanical engineering, strong experience in the financing industry and currently serve as Managing Partner in two giant VCs. Can you share a bit of the transition?
Previously, I’ve been in a sales organization that handles industrial product distributors. Then, I moved to IBM and really got into the tech stuff. In my last year, I’ve been handling the financial sector (around “11 banking institutions), combining IBM’s solutions to advise banking customers.
In 2002, I co-founded a software company, and my evolution as a founder continue until I decided to exit in 2007. However, I was still around as a Director for several years up to 2010. After that, I’m not immediately started a new company. What I learn as I started my own company, the hardest part is to align the vision, mission, and chemistry with partners. It is bad enough when you meet the wrong partner.
My next journey is to be a business consultant, and the story gets better when I worked with Plasa.com. That is where I build a work-related relationship with Andi S. Boediman, the other Managing Partner in Ideosource. It was late 2010 when I meet a general partner of a big-enough Private Equity (PE), and he said then would be the perfect timing to start a VC. We did our research around 4-5 months to finally debuted with Ideosource. It was a simple analysis, in late 2010, 3g penetration is still around 30 million with the rapid growth of internet users. It was also the beginning of the e-commerce era.
Starting with mechanical engineering, grasping some financial background, and accidentally creating a VC, I’m learning during the process. The thing is, I learned that running a business, and generating cash flow with available funds for growth are totally different. A conventional business survives only with cash flow. Once I entered the VC scene, there are other perspectives. It is ok if you don’t make a profitable business at the beginning, as long as you are analyzing a certain business model in a sector that you can be sure to be a dominant player.
This kind of perspective makes me see there are totally two different worlds. Many people find it hard to understand that capital market, venture investment, and startup thesis, are totally different from conventional business. An interesting fact, the availability of funds will never lessen. It is just a matter of who can convince people with loaded bags of money to invest.
Early days of Gayo Capital
What are your hypotheses on the portfolios?
In terms of analyzing, it is relatively similar. First, we need to look at the founder’s quality, integrity, and so on. Sometimes, when the founder is approved, the fund is secured. Furthermore, we are to discuss the sector, business model, addressable market, and the target for several years. Also, is it attractive enough for the investors? Because liquidity can only work if the story is compelling for the next investors. We’ll be reluctant if there’s no story.
What is your biggest hardship during the business journey?
Hardships are inevitable. I previously mentioned the hardest part is finding the right partner. That is one of the reasons why I have several initiatives with different partners. Each of them has quite a distinct appetite, knowledge, and passion. Ideosource was a fruit of the seed that Andi Boediman and I planted a decade before. Our creativity doesn’t stop there, Andi has his shared interest with Ideosource Entertainment, while I’m nurturing more impact-initiated startups with Gayo Capital.
Along the way, we found that investing in the upstream sector has its own challenge. The founder gap is clear. The quality of founders in the upstream and downstream sectors is quite big, especially outside of Java Island. Recently, we’ve launched our latest initiative named Starcamp to bridge founders with all kinds of information and tools to build qualities and step up their game. This is a marathon as we also develop the founders to deliver vision and mission.
You have previously mentioned the founder gap, also investors should be more invested in the upstream sector, what’s your take on this issue?
In terms of the founder gap, I think it is fine for the startups with a focus on the core technology to be headquartered in Java. When the infrastructure is ready, they can deploy it outside the island. Therefore, if there are other cases like eFishery, startups outside Java could replicate the concept. They did not necessarily become a tech company but they can be a facilitator.
There are many in the agriculture sector, these are companies we tried to invest in. We’ll create together a more scalable business model that allows them to expand outside of Java. This is the kind of upstream investment I was roaming about, for investors to invest in a certain technology to be licensed outside the island. An integrated value chain happens there.
The thing is, innovation in conglomeration takes 5 to 10 years, just like in the upstream sector. Not many startups are brave enough to enter this scene, only conglomerations with strong capital and a 10-year investment horizon. How can VCs have a conglomerate-like horizon and invest in such kinds of startups?
I have one terminology in Gayo Capital, a reverse conglomeration, inspired by the downstream sector portfolios in Ideosource’s early time which currently has contributed a lot more. Why can’t it be the upstream sector? If we’re going to rely only on conglomeration, the innovation is limited although it has a big contribution to the GDP. Startups have potential as long as they focus on creating an ecosystem that is integrated with each powerful core business, therefore, creating a solid value chain.
Aside from the current position, you’re also in charge of this year’s Nexticorn highlighting the emerging sector. Can you elaborate on this matter?
Such names are emerging this year, including the web3 and its definition which is still fragmented. However, the underlying of this blockchain technology has tremendous evolution. People are learning about bitcoin, the NFT is rising, and more platforms are developed to cater to this industry. The concept is aiming to be a decentralized autonomous organization. That’s the ultimate destination.
Edward Chamdani diampu sebagai CEO NXC 2022
In the crypto scene, we’ve seen people are still relying on the exchange. In the future, the role might be getting less needed as people are having their own wallets and stuff. In the future, peer-to-peer will exist, and decentralized finance will happen. Disruption will be more extensive than ever, including in VCs.
VCs and investors are said to be more careful and selective to place their money. What is your suggestion for the startup?
I think those who are too insecure might lose the opportunity. Every situation has its moment. It all comes back to the hypothesis. Even in the most peculiar situation, if the market is there and in need of a solution, and it is possible to be executed, it is a deal. I think the more investors are hesitant, VCs who can see the opportunities shouldn’t stop.
In fact, using the “growth at all cost” strategy to be a dominant player is so last year. Investors are now looking for growth to profitability. It’s no longer an era for “burning money”, there are already many casualties. It is a natural correction. Investors will also see the country’s direction while doing investments related to the regulation and government. This will also be the highlight of this year’s Nexticorn. There will be related policymakers to explain Indonesia’s objective toward the tech industries, from crypto, tax, and exchange regulations.
As a seasoned investor with tons of experience in the industry. What is your biggest dream about this country’s tech and investment ecosystem?
After a decade or two in the tech industry, building Ideosource while hands-on in various sectors, focusing to impact with Gayo Capital, and bridging the founder’s gap with Starcamp, the main objective is one. I want Indonesia to be able to unlock its full potential. Even with the founder’s gap, there must be an initiative that we can work together to create a path for them. This is also the reason I’m very excited to join Nexticorn.
I’m also part of several associations, including Amvesindo and Aludi. All of their initiatives are merely to aspire the startup and investment ecosystem in Indonesia to be better. For the people to not depend solely on conventional financial sources and instead have alternative funding. From unbankable to bankable.
On the other side, we need to provide education and nurturing, also mentorship for them. As it continues to grow, various associations with its own specific subject, including Nexticorn, will open new doors to global investors. By saying this, hopefully, Indonesia can be faster to unlock and unleash its truest and full potential. Personally, after setting this vision and mission, I can work more focused and with purpose.
After the new unit, Ideosource Entertainment, created to accommodate investment in a specific industry, Ideosource plans to target another business coverage. The company has officially announced a new entity named Gayo Capital, in charge of Ideosource Green Initiative.
Gayo Capital’s Co-Founder & Managing Director, Edward Ismawan Chamdani told DailySocial that the new venture has its own managed fund consists of “strategic investors” as Gayo Capital’s partner; later, there will be other funds as the investment thesis developed.
“Gayo was formed in early 2020, in fact, the idea and research have been brewed for 2.5 years,” Chamdani said.
Gayo Capital also has Ishara Yusdian to lead along Chamdani, both are fully responsible for the operation and execution of the defined roadmap. While Jefri Sirait and Andi S. Boediman acted as advisors.
Gayo Capital investment approach
The investment approach is quite unique, they’re focus on two things. First, Gayo targets companies that are working on a large traditional/conventional market share, for example in the agricultural, logistics, retail, supply chain, and others. However, they ensure that technology can be components of disruption. Ideosource’s experience is expected to improve the process of digital transformation in order to improve business.
Second, the founder sees fund pattern in venture capital does not match the investment thesis in conventional companies. There should be a breakthrough in order to connect. Therefore, an operating holding is formed, combining the “venture debt” model. It allows companies to obtain a “working capital” kind of funding, comes with intensive equity; in financial terminology, it is called “quasi-equity”.
“However, this pattern is to be combined with the venture capital model, in general, using a closed-ended fund structure, particularly for our investment in pure-tech companies,” Chamdani continued. “We basically expect to form a ‘reversed conglomeration’, where the companies we help and invest in are able to innovate and put a breakthrough in their respective sectors and make changes to the bottom-up business patterns.”
In addition to capital assistance, as an operating holding, Ideosource expects to play a role in providing direction, opening networks, providing access to capital, and forming inter-company synergies.
“Gayo Capital as an operating holding company has invested in several companies such as Inacom, PT Petani Kakao Lampung, WLabku, Hydro Retailindo, Foom.id, and several other portfolios in the ongoing process of mentorship and initial investment,” Chamdani said.
Optimizing business potential in Indonesia
In particular, Chamdani also told the reason behind Gayo Capital’s focus on business in Indonesia. There are quite principal reasons; He told an example, most of the agricultural sectors, such as coconut, cocoa, pepper, and others are managed by regular farmers. However, there is no disruption in terms of the supply chain that provides efficiency in the buying and selling, export-import, and product innovation processes.
“While we know that Indonesia’s strongest demographics in the world for this sector and archipelago land have indeed been the target of the entire world since the colonial era, it’s time for innovation to grow not from the top-down course, we hope the bottom-up can be more and more bold,” explained Edward.
Gayo through its social foundations will also penetrate the farmer-specialize education sector with a specific curriculum according to their managed land; currently under discussion with the stakeholders to be involved.
Investment amid pandemic
Debuting amid a crisis caused by the pandemic didn’t wash off the spirit of Gayo Capital’s founders. Edward and his team believe that timing as one of the key components along with strategy, roadmap, team, and capital.
“In every crisis, there will be a greater opportunity, just as the ball we press into the water will bounce higher and faster when released,” Chamdani shared a parable. “Every week we’ll be contacted by 1 to 3 Asian and American financial companies wanted to dig more on Gayo Capital, and we believe that we’re working in the right sector.”
We’ve come into anticipation of the “new normal” situation. Edward also said the shaded sectors are now increasingly focused on transparency. That is because each party is getting more literate on technology, creating technological opportunities to be elaborated.
– Original article is in Indonesian, translated by Kristin Siagian
Setelah Ideosource Entertainment sebagai anak unit ventura yang mengakomodasi investasi di bisnis hiburan, Ideosource kembali memperlebar cakupan bisnisnya. Kali ini dengan meresmikan entitas baru bernama “Gayo Capital”, menaungi Ideosource Green Initiative.
Kepada DailySocial, Co-Founder & Managing Director Gayo Capital Edward Ismawan Chamdani menyampaikan, perusahaan ventura baru ini telah memiliki dana kelolaan sendiri, terdiri dari “strategic investor” yang menjadi partner di Gayo Capital; dan ke depannya juga akan ada “fund” sesuai perkembangan tesis investasi yang dikembangkan.
“Gayo dibentuk secara formal awal tahun 2020 ini, namun cikal bakal ide dan riset sudah kita lakukan sejak 2,5 tahun yang lalu,” ujar Edward.
Selain Edward, Gayo Capital dipimpin oleh Ishara Yusdian, keduanya bertanggung jawab penuh pada operasional dan eksekusi roadmap yang sudah didefinisikan. Sedangkan Jefri Sirait dan Andi S. Boediman bertindak sebagai advisor.
Pendekatan investasi Gayo Capital
Pendekatan investasi yang dilakukan cukup unik, fokusnya ada pada dua hal. Pertama, Gayo menargetkan perusahaan yang menggarap pangsa pasar tradisional/konvensional yang sudah besar, misalnya di lanskap pertanian, logistik, ritel, supply chain, dan lainnya. Namun, mereka memastikan bahwa nuansa teknologi dapat menjadi komponen disrupsi. Pengalaman Ideosource diharapkan dapat meningkatkan proses transformasi digital tersebut dalam rangka meningkatkan bisnis.
Kedua, founder melihat pola struktur fund di modal ventura tidak cocok dengan tesis investasi di perusahaan konvensional. Perlu adanya terobosan untuk menjembatani. Maka dari itu dibentuk operating holding, mengombinasikan model “venture debt”. Memungkinkan perusahaan mendapatkan pendanaan yang bersifat modal kerja, namun tetap dengan intensif ekuitas; dalam terminologi finansial disebut “quasi-equity”.
“Namun pola ini setelah berkembang tetap akan kami kombinasikan dengan model venture capital umumnya dengan struktur fund yang close-ended juga, khususnya untuk investasi kami ke perusahaan yang pure-tech,” lanjut Edward. “Yang kami harapkan pada dasarnya membentuk ‘reversed conglomeration’, di mana perusahaan-perusahaan yang kami bantu dan investasikan mampu melakukan inovasi dan terobosan di sektor masing-masing dan membuat perubahan pola bisnis yang sifatnya bottom-up.”
Sehingga selain memberikan bantuan modal, diharapkan sebagai operating holding Ideosource dapat berperan memberikan arahan, membuka jaringan, memberikan akses ke kapital, dan membentuk sinergi antar-perusahaan.
“Gayo Capital sebagai operating holding company sudah memiliki investasi di beberapa perusahaan seperti Inacom, PT Petani Kakao Lampung, WLabku, Hydro Retailindo, Foom.id; dan ada beberapa portfolio lainnya yang sedang dalam proses mentorship dan investasi awal,” kata Edward.
Optimalkan potensi bisnis di Indonesia
Secara khusus Edward juga menceritakan mengapa Gayo Capital difokuskan untuk bisnis di Indonesia. Ada alasan yang cukup prinsipil; ia mencontohkan, sektor pertanian kelapa, kakao, lada, dan lainnya sebagian besar masih dikelola petani rakyat. Namun belum ada disrupsi di sisi supply chain yang memberikan efisiensi pada proses jual-beli, ekspor-impor, hingga inovasi produk.
“Sedangkan kita tahu demografi Indonesia terkuat di dunia untuk sektor ini dan lahan archipelago memang sudah menjadi incaran seluruh dunia sejak jaman penjajahan, sudah waktunya inovasi tumbuh bukan dari top-down saja, kita harapkan bottom-up bisa makin banyak dan berani melangkah,” terang Edward.
Gayo melalui yayasan sosialnya juga akan masuk ke sektor pendidikan khusus petani dengan kurikulum yang spesifik sesuai tanah kelolaan mereka; saat ini tengah dalam tahap diskusi dengan para stakeholder yang akan terlibat.
Investasi di tengah pandemi
Debut dibarengi dengan krisis yang disebabkan karena pandemi tidak membuat semangat pendiri Gayo Capital luntur. Bagi Edward dan tim, timing menjadi salah satu komponen kunci dibarengi dengan strategi, roadmap, tim, dan kapital untuk dieksekusi pada waktunya
“Di setiap krisis pasti ada peluang yang makin besar, sama seperti bola yang kita tekan ke dalam air akan melambung makin tinggi dan cepat pada saat di lepas,” ungkap Edward memberikan perumpamaan. “Dalam setiap minggunya kami di hubungi 1 sampai 3 perusahaan finansial Asia maupun Amerika yang tertarik mengenal Gayo Capital lebih dalam, jadi kami melihat sektor yang kami garap memang sudah tepat.”
Perubahan yang akan menjadi “new normal” juga sudah mulai diantisipasi. Edward turut melihat, sektor-sektor yang dinaungi juga makin memfokuskan pada transparansi. Hal itu dikarenakan setiap pihak makin melek teknologi, sehingga peluang teknologi untuk bisa dielaborasikan di dalamnya.
On August 17, 2017, Tokopedia.com, the largest eCommerce marketplace in Indonesia, announced its latest round of investment of USD 1.1 billion from Alibaba Group. month before that, Traveloka, another unicorn and top online travel booking startup, received a USD 350 million investment from Expedia. The list goes on with other startups like Go-Jek and Tiket.com, both of which secured deals with local and regional/global investment firms.
Indonesia has definitely become one of the magnets for key investments by major venture and private equity funds in quest of another country with potential growth after China and India. Indonesia, with a population of 260 million, is the largest among neighboring ASEAN countries. But with more than 16,000 islands, the world’s largest archipelago faces a more challenging logistical coverage in handling its abundant natural resources and a production age group that comprises 60% of the population.
But chances are scant for Indonesian startups to undergo a public offering once they dominate certain sectors and popular business models already favored by regional/global strategic investors. Those strategic investors are likely to have major stakes already in pre-established companies, making it difficult for Indonesian institutional and retail investors to participate.
As of now, no tech startup company is listed in the Indonesian Stock Exchange. Is this an indication of scant interest from local investors to invest in technology companies?
I would say definitely the answer is not like what we have perceived. In fact, most of Ideosource’s limited partners (investors) are from Indonesia. Our LPs are sophisticated investors, but it does not mean that retail investors are not interested. It is just not possible for them to participate due to a minimum check size of investment, length of fund period that usually spans from five to ten years before getting any return, and other aspects involving limited exposure to startup investment.
Even some of my close friends have asked me whether they are able to participate in the Ideosource fund at a smaller amount. Success stories among tech startups are ubiquitous — traditional companies and local conglomerates have set up their own initiatives and funds to dabble into tech startup investments. However, most individual retail investors have no access to participate in any of those great startup successes. They can only hear about them, wondering in awe.
How about the risks?
Nevertheless, those successful startup companies are only a handful among hundreds or even thousands of startups that have existed in Indonesia — failed companies are ubiquitous too. It is not for the fainted hearts to see some of their investments go down the drain, so it is definitely a reason to call them sophisticated investors. Traditional security and asset management companies would not dare to deal with failed companies in numbers that most VCs see as normal; moreover, most of those so-called successful startup companies are not in blue or bleeding to the bone with their marketing spending to boost revenues and user base.
There is no precedence in Indonesia to a public company like Amazon, which had been in the red for 20 years until mid-2016. Amazon investors understood Amazon would need to invest big and re-invest all of its retained earnings to reach a certain stage where they dominate the market putting a (very) high barrier of entry in the sector. As a result:
“Had the average Joe decided to save $5,000 and spend it on Amazon’s stock when it first hit the public markets 20 years ago, they be worth at least $2.4 million today.”
Ideosource is no different during our early years of fund setup. We had failed startups in our list too, and most of those startups failed after not finding the follow-on investors — the ecosystem was not there. So since then, we decided to ensure our startups are cockroaches (resilient creatures) able to stay alive for longer time despite slower follow-on investment process.
It may not be justifiable from the winner-takes-all-type investment thesis, which values only one winner through buying traffic, transaction, and customers. Instead, we look into companies with passionate founders who do not believe in the “blitzkrieg” type of model, most of them believe in winning the space by being a resilient creature, because they are happy doing what they have been doing building the companies from the ground up, creating a strong team, strong culture internally and able to win the customers in the long-term by being trusted and all out to serve.
As a consequence, we have been more selective in our startup investments, but fortunately any investment we made during and after 2015 have flourished and are in a very good stage, primed for next stage exponential growth. We also learned to provide investment with enough runway for them to reach certain numbers attractive for follow-on investors to come in.
Can the risks be mitigated?
The nature of startup investment locally in Indonesia has improved a lot, Ideosource case above is just an example from our internal experience, and other venture capitals even angel investors have matured and have been exposed quite long also having met hundreds of startups and often mingle during startup events giving a much sharper decision on who are investable. Same thing with startups quality now have improved year on year getting into a stage whereby choices are wider and we know the risk to invest on the best among those pool is actually quite save, at least from the eye of an experience and exposed investors. Probably similar to Amazon investors in the early IPO days able to understand and realize Jeff Bezos’ long term goal and they stick to support its vision.
VC investment model can work well in the hand of an experience investment committee and it has to be in quantities to compensate for failed startups, many people have heard the one success or jack-pot investment will provide return and profit for the rest of nine investments or even the whole fund. As in Ideosource Fund I, one financial technology (fintech) startup provided 80x return, normalized to around 8x return as a fund. Although not as a spray and pray model and more of a specific investment thesis, the statistic proved to be true.
So is investing in Indonesian tech startups attractive?
Yes.
And, does it mean that public and individual retail investors can participate freely investing on their own? The answer is better to be “no”, simply due to several factors discussed before:
Liquidity and Investment Size: a five to ten years investment period is common with a minimum check size of $50k to $250k. It may work for angels but probably not for retail and public investors.
Handling the Risks: even sophisticated investors rely on venture capital firms to manage their investment simply to manage the risks. They know that those venture capitals via its investment management team will take care of portfolio screening and due diligence, diversification, and mentoring.
Mentoring: this is one of the most sought after value most startups look for from their institutional and angel investors. They want to speed up the process without:
too much trial and error getting advise from veterans, and
to be introduced to the right channel and network
to get shared resources for back-office administration, accounting, taxation, legal, working space and many others.
How about liquidity issue?
Underwriters, brokers, clearing house, custodian, appraisers, legal firms, trustees and administrators are all part of the ecosystem surrounding the stock exchange to ensure offering and transaction are smooth without glitch and legitimate. However, we certainly know that to list a company publicly assisted by those parties in the ecosystem and to maintain it in the stock exchange are relatively expensive, moreover for smaller cap companies.
The crowdfunding site Kickstarter has radically changed the way creative ventures can raise money in the Internet age. In 2014, 3.3 million people around the world contributed more than $500 million — roughly $1,000 a minute — to finance more than 22,000 projects.
Other equity based crowdfunding startups have also emerged with attractive offering combining researched data and seasoned investor communities such as funnel.com, funderbeam.com, crowdfunder.com and many others.
Can crowdfunding sites be as popular to retail and public investors as the stock-exchange? probably yes if liquidity is there.
We see extreme cases now happening in cryptocurrency trend of raising money via Initial Coin Offering (ICO). The crypto-coin provides instant liquidity, easily tradable via blockchain platform. It is an extreme approach due to many ICOs are not based on real tangible assets, but at the end only a few will sustain its value due to many of them not supported by the right business model suitable for token trading.
A few smart crowdfunding sites now offer extended liquidity via ICO or token creation for easy secondary trading of those crowdfunded assets they have funded, and it is almost like a small private ICO with real assets being appraised and appreciated or depreciated according to the performance of the company. And the ownership of assets that have been tokenized can be traded easily by selling the token/coin to other traders, and this can happen without disturbing the underlying contract of the asset itself.
Conclusion
I truly believe that tech startup investment can be offered to Indonesian retail and public investors as in the case of traditional stock exchanges, perhaps via secondary board implementing a combination of positive factors offered by traditional stock exchanges but agile and efficient as in the new era of cryptocurrency. The key is an ecosystem inviting relevant parties and regulators to contribute according to their roles and responsibilities to ensure checks, re-checks and balances are happening during the process with reasonable costs and ease of participating.
– This guest post is written by Edward Ismawan Chamdani, Ideosource Venture Capital’s Co-Founder and Managing Partner.
It’s initially published at Medium and has been republished with permission.
Setelah mendapatkan seed fundingdelapan bulan silam, TuringSense terus bergerak untuk merealisasikan tujuan mereka dalam merevolusi dunia olahraga. Sekarang mereka tengah menjajaki kerja sama di berbagai belahan dunia. Kami mendapat kesempatan berbincang kembali dengan CTO dan Co-Founder TuringSense Joseph Chamdani, PhD dan Managing Partner Ideosource Edward Ismawan Chamdani untuk mengetahui lebih jauh rencana-rencana apa saja yang disiapkan TuringSense.
TuringSense adalah startup pengembang teknologi wearable untuk olahraga yang berbasis di Sillicon Valley. Startup ini juga digawangi oleh dua orang researcher asal Indonesia, yaitu Joseph Chamdani (CTO) dan Chris Lim (VP of Product and Marketing). Keduanya turut andil dalam pengembangan produk PIVOT yang berfungsi untuk merekam dan menganalisa gerakan tubuh yang kini digunakan untuk cabang olahraga tenis.
Joseph mengatakan, “Bicara tentang alat [wearable devices] PIVOT, di dalamnya ada tiga sensor yang terdiri dari Accelerometer, Gyroscope, dan Magnetometer. Itu semua dikombinasikan, istilahnya sensor fusion. Sensor ini dapat mengikuti apa yang digerakan-tanpa kamera, dan kami bisa lihat animasinya. Ini sebenarnya banyak digunakan di Hollywood, tetapi [cost] lebih mahal.”
Kisah singkat di balik membangun TuringSense yang berbasis di Sillicon Valley
TuringSense sendiri adalah startup berbasis teknologi ketiga yang dibangun oleh Joseph (Joe), pria yang kini memegang 46 paten dari penelitiannya dan 35 paten sedang dalam proses. Salah satu alasan Joe mendirikan TuringSense adalah karena kecintaan dia pada olahraga, terutama tenis. Di sisi lain, faktor harga sensor yang sudah jauh lebih terjangkau adalah alasan lainnya.
“Sensor juga sekarang sudah mulai canggih, affordable, dan akurat. […] Kami kombinasikan itu dengan software yang kami buat sendiri [dan]sensor ini wireless. Wireless yang kami pakai sama gelombangnya dengan yang 2,4 GHz, tetapi kami develop protokolnya sendiri […] dan itu sudah jadi paten kami,” kata Joe.
Meski berdiri di Sillicon Valley, namun membangun TuringSense sebagai startup wearable device yang mengarah ke IoT pada dasarnya tidak jauh berbeda dengan membangun startup pada umumnya. Mulai dari konsep, mengetahui kondisi pasar, hingga membentuk tim untuk eksekusi sudah dijalani oleh Joe dan rekannya agar bisa mendapatkan kepercayaan investor untuk menanamkan modal.
Ada satu perbedaan nyata yang bisa dilihat bila dibandingkan dengan membangun startup IoT di Indonesia. Perbedaan itu datang dari sisi kemudahan mendapat material untuk membangun produk yang saat ini belum bisa dirasakan di Indonesia.
Joe menjelaskan, “Membangun TuringSense harus kerja payah sendiri. Tidak ada insentif dari pemerintah, semua private funding. […] Tapi di sana itu kan pusatnya, jadi semuanya lebih mudah untuk didapatkan[material untuk produk]. […] Infrastruktur di sana memang sudah bagus.”
Langkah dan rencana setelah pendanaan
Sensor PIVOT yang dikembangkan TuringSense saat dalam kondisi di-charge / DailySocial
Pasar yang dibidik oleh TuringSense adalah pasar internasional dan saat ini TuringSense tengah menjajaki kerja sama di berbagai negara. Indonesia adalah salah satu pasar yang dituju. Di samping itu, masih ada Tiongkok dan juga negara-negara Eropa lainnya
Edwin mengungkapkan, “Di Indonesia, selain bertemu dengan investor , kami juga bertemu dengan calon-calon yang nantinya bisa pakai PIVOT. Kami sudah datang ke Djarum Foundation, dan akan berbincang dengan Persib. Jadi kami mau lihat PIVOT ini bisa tidak dipakai untuk sepak bola dan badminton.”
“Di Indonesia sendiri ada beberapa investor. Kami juga akan bantu TuringSense untuk fundraising lagi berikutnya, baik dari investor yang sudah ada maupun yang baru. Jadi, untuk cashflow positif mungkin ada dua round fundraising lagi yang akan dilakukan TuringSense,” lanjut Edwin menjelaskan.
Sementara itu di pasar Amerika Serikat sendiri, Joe mengungkap bahwa pihaknya telah menjalin kerja sama dengan tim basket Dallas Mavericks. Di bulan September nanti, teknologi PIVOT akan dikirim dan digunakan Mavs untuk membantu meningkatkan performa pemainnya.
TuringSense juga saat ini tengah dalam penjajakan kerja sama dengan partner yang ada di Inggris. Kerja sama ini nantinya akan memungkinkan PIVOT untuk masuk ke dalam English Premier League dan juga cabang olahraga Rugby.
Di samping olahraga, kerja sama di bidang kesehatan juga sudah dijalin. Di sini, TuringSense bekerja sama dengan Sport Surgery Clinic di Dublin dan Stanford Neuroscience. Pada dasarnya, melalui kerja sama ini TuringSense akan mencoba membantu rehabilitasi pasien dengan cara yang menyenangkan seperti menggunakan game.
Joe mengatakan, “Ini kembali kepada membangun ekostem. Jadi kami itu sebagai company terlalu kecil, dan fokusnya akan kemana-mana kalau mengerjakan ini semua sendiri. […] Nah, yang kami akan bangun adalah 3D Motion Platform, dari teknologi hardware dan software dan juga cloud-nya supaya bisa masif deployment-nya. […] Seperti Apple dengan iPod yang sukses. Music platform-nya iPod, 3D Motion platform-nya TuringSense. Itu analoginya.”
Dengan menciptakan 3D Motion Library dari PIVOT, gerakan seorang atlet atau penari bisa terekam. Selain bisa dimanfaatkan untuk melatih generasi berikutnya, Joe menyampaikan bahwa tidak menutup kemungkinan juga seorang atlet untuk bisa mendapatkan royalty dari gerakan yang diciptakannya.
Lebih jauh, Joe menjelaskan bahwa di tahap awal ini TuringSense memang sengaja melancarkan strategi go-to-market B2B terlebih dahulu. Alasannya, lebih mudah menjual melalui channel. Tapi, ke depannya tidak menutup kemungkinan untuk masuk ke ranah hiburan seperti game. Bila sudah masuk ke ranah ini maka bisnis TuringSense juga akan menjadi B2C.
“Agar adopsinya cepat dan tidak susah, kami pakai model subscription. Jadi, boleh dibilang hardware-nya free, dalam arti ada bayar bulanan. Kalau di Amerika itu $49/month. Kami jual ke akademi untuk bisa dipakai lima orang dengan kontrak satu tahun. Tapi, kalau muridnya suka dan ingin beli sendiri, mereka juga bisa dengan membeli satu set seharga $399. Karena store data di cloud, akan ada bayar bulanan juga sebesar $10/month,” ungkap Joe lebih jauh.
Saat ini, tim TuringSense sudah mencapai 15 orang di Sillicon Valley, enam orang di Italia, dan dua orang di Tiongkok. Sementara itu tim TuringSense di Indonesia sendiri sudah mencapai lima orang, salah satunya adalah Bullit Sesariza yang saat ini fokus dalam pengembangan UI/UX aplikasi PIVOT.
