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Jofie Yordan · · 5 min readIndonesian startups’ struggles pose dilemma for Danantara
Danantara, Indonesia’s new sovereign wealth fund (SWF), has often been compared to Singapore’s Temasek, including by government officials. But unlike Temasek, startup investments are still a question mark for Danantara.
The Indonesian SWF – which has an initial capital of US$20 billion – has not explicitly said it would focus on startups. Instead, it is prioritizing investments in sectors such as natural resource processing, AI development, and energy and food security.
Danantara’s office in Jakarta / Photo credit: Tuti SW/Shutterstock
This may change. For one thing, Danantara has appointed AC Ventures co-founder Pandu Sjahrir, one of Indonesian tech’s most prominent power players, as its chief investment officer (CIO).
Plus, Danantara could be a much-needed investment source for the country’s late-stage startups, which are struggling to raise funds.
On the flipside, it is precisely these struggles – particularly the recent fraud scandals – that would affect the SWF’s standing in the eyes of global investors.
“A single bad investment could shake confidence in Danantara’s ability to manage risks,” says Rexi Christopher, venture partner at Init 6.
Tech in Asia reached out to Danantara but did not receive a response by publication.
Long way to go?
Temasek has played a significant role in shaping Southeast Asia’s startup ecosystem. It has invested in companies like Gojek and Sea Group, either directly or through subsidiaries like Vertex Ventures.
But the Singaporean firm did not begin with startup investments. Instead, it first built a strong foundation in fund management before gradually expanding into riskier assets, points out Christopher.
The investment firm “spent decades refining its investment strategy before becoming a dominant player in venture capital,” he says.
Christopher believes Danantara is also unlikely to prioritize startup investments soon, though it may do so in the future.
See also: Mapping Temasek’s role in the startup space
Besides Danantara, Indonesia has other SWFs. Among them is the Indonesia Investment Authority (INA), which has not been particularly active in startup investments either.
New hope for mature startups?
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The country’s startups sorely need a fresh funding source. But fraud and other issues may push the sovereign fund elsewhere.
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