Indonesian state-backed startup fund raises $300m in first close

Indonesian president Joko Widodo / Photo credit: Cabinet Secretariat of the Republic of Indonesia

The Merah Putih Fund, a venture capital firm backed by the Indonesian government, has raised US$300 million in the first close of its inaugural fund.

Participants in the raise include BNI Ventures, BRI Ventures, Mandiri Capital Indonesia, MDI Ventures, and TMI Ventures. All five are corporate VC arms of Indonesian state-owned enterprises.

First announced by President Joko Widodo in December 2021, the Merah Putih Fund aims to invest in Indonesian soonicorns, including those who are raising series C and series D funds.

Target companies must operate in Indonesia, have an Indonesian founder, and have a roadmap for an IPO in Indonesia or a merger with another Indonesian company.

They must also have a “pre-money valuation of US$200 million,” Eddi Danusaputro, Mandiri Capital CEO, said previously. “As we are managing funds from state-owned enterprises, early-stage companies are too risky for us.”

The fund has also obtained a license from Otoritas Jasa Keuangan, Indonesia’s financial services authority, in August 2022.

According to MDI Ventures CEO Donald Wihardja, Merah Putih Fund is targeting other state-owned enterprises for its second close, which will also be US$300 million in size.

Its third close, however, will be open to privately owned companies.

Amid the tech winter, however, the fund has adjusted its target return of investment from a range of 18% to 20% to 14% to 16%, said Nicko Widjaja of BRI Ventures.

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This is a version of an article first published by Mujahid Fidinillah on Tech in Asia Indonesia.