From big tech to cakes: Indonesia’s state VCs retreat to safety

Indonesia’s state-backed venture capital firms haven’t made any tech investments since executives at two of the country’s largest funds were detained last year over losses tied to a failed deal. This has choked off a key source of funding for the sector at a time when private capital is also in retreat.

Mandiri Capital Indonesia is the only one to have made an investment since the case, and it’s in a sector that’s as far from tech as possible. In August, it backed Japanese-inspired cake and dessert brand Dore.

In June, the four former executives from MDI Ventures and BRI Ventures implicated in the case, which involved investments in agritech startup TaniHub, were convicted and sentenced to prison, deepening the chill.

Image credit: Ulla

The sector is also facing structural upheaval and a broader deterioration in market conditions. President Prabowo Subianto has ordered Danantara, the country’s sovereign wealth fund, to cut the number of state-owned enterprises from more than 1,000 to 250 by the end of this year.

Until that settles, no one inside the firms knows whether the companies will still exist in a few months’ time.

The country’s handful of state-owned VCs have long played a significant role in the tech industry.

During the startup boom, they helped provide capital to some of Indonesia’s largest tech businesses when these were still fledgling firms, including unicorns GoTo, Bukalapak, Xendit, and Kredivo. They also recorded several notable exits through IPOs and M&As.

In general, startup funding in 2025 fell to US$700 million across 70 deals, down from a 2021 peak of US$10.9 billion with 267 deals.

“The pipeline is definitely getting thinner,” says Edmund Carulli, BNI Ventures’ head of investment, referring to the declining number of new startups in the market.

MDI Ventures and BNI Ventures stress that they are still open for business. The latter is targeting two to three investments a year, at US$2 million to US$5 million per company, though none have been approved so far this year. The former says it continues to evaluate new opportunities while supporting its existing portfolio.

MDI Ventures, the venture arm of Telkom Indonesia, had US$656 million in assets under management last year, and Mandiri Capital had US$322 million. Figures for the other firms aren’t public.

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