Indonesia launches fund for soonicorns

Indonesian President Jokowi officially launched the Merah Putih Fund, a venture capital fund that is backed by state-owned enterprises (SOEs).

At the inauguration ceremony on Wednesday in Jakarta, Jokowi revealed that the Merah Putih Fund would focus on investing in soonicorns (firms soon to be unicorns).

“We already have seven unicorns and there are lots of soonicorns which will continue to be encouraged to become unicorns and decacorns,” said President Jokowi.

Indonesia president, Jokowi / Source: Cabinet secretariat of the republic of Indonesia

Mandiri Capital, BRI Ventures, MDI Ventures, and Telkom Mitra Inovasi are the initial SOE investors backing the fund. Besides SOEs, the national private sector has also been invited by the president to join the Merah Putih Fund.

Some reports suggest the launch of the Merah Putih Fund will take place on December 17, but Eddi Danusaputro, CEO of Mandiri Capital, confirmed it would be launched on December 15.

In the first and second quarter of 2022, the Merah Putih Fund will aim to raise a total of US$300 million for investment in soonicorns.

“We are not targeting how many startups will be funded. We are looking for quality,” said Danusaputro.

Merah Putih Fund will focus on startups that already have a track record of fundraising. The fund’s investments will not be limited to certain business verticals, Danusaputro noted.

Erick Thohir, Indonesia’s SOE minister, also stated that startups would have to meet several criteria to be funded by the Merah Putih Fund. An eligible company will have an Indonesian founder, be operating in the country, and have plans to go public in Indonesia.

There are several Indonesian startups such as Ruangguru, SiCepat, Social Bella, GudangAda, and Kopi Kenangan that are predicted to soon become unicorns.