People expected him to fail. But he’s making a case for Indonesia’s corporate VCs

In mid-2015, when Nicko Widjaja took the helm at MDI Ventures, the venture capital arm of Indonesian telco Telkom Indonesia, people were skeptical.

“A lot of VCs thought that we wouldn’t perform. How can we perform when we’re technically under a corporate parent? There’s no way we could’ve invested in anything [worthwhile],” Widjaja tells Tech in Asia.

Photo credit: Nicko Widjaja

But if a VC firm’s success is measured by the number of portfolio company exits it achieves, then MDI has done rather well for itself. Red Dot Payment and Wavecell, two of the firm’s Singapore-based investees, were acquired this year, and a third portfolio company, Whispir, has also just gone public in Australia.

Widjaja, too, has recently undergone a big change. After more than four years at MDI, he took up the position of CEO at BRI Ventures in August 2019, a new VC firm with US$250 million in capital. Focusing on fintech startups, BRI Ventures is backed by Bank Rakyat Indonesia, one of the country’s larger state-owned banks.

“Again, there was a lot of the same skepticism,” he says. “But you work to challenge yourself, to keep challenging your team.”

‘Venture’ capital, not ‘tranquil’ capital

Telkom is one of Indonesia’s biggest companies, with a market capitalization of almost US$30 billion – the third-largest in the country. It is also majority-owned by the Indonesian government.

Among legacy companies, it was a pioneer in the startup scene. Telkom established MDI Ventures back in 2015, a time when Indonesia didn’t have unicorn startups yet.

It was perhaps the first time the country saw a legacy company set up its own VC firm, Widjaja says. But it also seemed to be a natural evolution for Telkom – the company had already launched Indigo, an incubation program for tech startups, in 2013.

The move may have also been driven by self-preservation. “Telcos are a dying business anywhere else in the world,” Widjaja notes. “Telkom would have been the first to get disrupted, and even then, it was already disrupted by OTT services in the early days.”

But before signing on at MDI Ventures, Widjaja was the assistant vice president for corporate development at Indofood – another large legacy company best known for its instant noodle brand Indomie. That was followed by a stint helping traditional firms across the region with digital transformation.

In 2011, he forayed into venture capital for the first time and founded Systec Ventures with a US$5 million fund. But the company didn’t take off in the same way as other VC firms like East Ventures, which had been established just a couple of years earlier.

“In late 2013, we kind of realized that we had been investing in the wrong ecosystems,” Widjaja recalls from his time at Systec. “When everyone was investing in the first wave of ecommerce, we invested in games, we invested in media. But it was a learning experience. From there, we went on a path of fundraising, and that’s how we met Telkom.”

Widjaja started out as an advisor at Telkom’s Indigo incubator before becoming CEO of MDI in 2015 with a US$100 million fund. In all, MDI has invested in more than 30 startups across Asia, including Thai ecommerce enabler aCommerce, Indonesian fintech startup Kredivo, Singapore-based communications platform-as-a-service provider Wavecell, Indonesian smart city app Qlue, as well as Singapore-based e-scooter sharing service Beam.

‘Vendor’ capital instead of ‘venture’ capital