Here’s how Indonesian telco Indosat is building the country’s startup ecosystem

Alexander Rusli, president director and CEO of Indosat

By now, you may have heard about Jakarta’s Ideabox accelerator letting all eight of its second batch startup finalists into the program last week. You may have also heard about the Japanese conglomerate SoftBank taking an interest in local tech ventures.

But what you may not realize is that the two initiatives have a common denominator in local telco Indosat, one of the archipelago’s largest telecommunication companies. Right now, Indosat is calling itself one of the most aggressive players in Southeast Asia’s tech startup scene, particularly when it comes to forming new partnerships.

Indosat president director and CEO Alexander Rusli says the Indonesian startup ecosystem is not yet mature for large investments, but he’s doing what he can to help it progress. “Indonesia is a place with a lot of creative people, but at the end of the day, these people will only keep doing what they’re doing if there’s light at the end of the tunnel,” he explains.

Teaming up with Japan

Last May, Indosat announced it had partnered with SoftBank to launch a US$50 million venture capital fund in Indonesia. Rusli claims the fund has looked at 16 potential investees so far, but hasn’t yet found one it’s keen to work with. He explains, “Finding [a] big enough ticket size here is bloody difficult.” According to him, most of the startups in Indonesia are not yet ready for capital investment of US$5 million to US$15 million, like the ones the Indosat-SoftBank fund is looking to dole out.

While the immaturity of the local playing field narrows down the list of companies the fund can consider, Rusli believes there are indeed a few ripe candidates in Indonesia right now, with more soon to follow. He says, “We invite more people to know about us and more people to work with us, even if they don’t need us. We’re hungry to work with people who have good ideas.”

Ideabox boot camp event

See: Softbank to invest $20 million in startups in the Philippines

A digital umbrella

At the same time as the Indosat-SoftBank announcement, Indosat deployed its “digital unit” to focus on growth areas like mobile advertising, ecommerce, and mobile financial services. Rusli refers to Indosat’s digital unit as the “umbrella initiative” for all of its startup activities.

The unit works closely with international communications firm Ooredoo – Indosat’s parent company – to leverage on global partnerships across 17 countries and expand its expertise. This naturally includes rubbing shoulders with Rocket Internet. Rusli explains:

Rocket in Southeast Asia is a sister company of ours. Ooredoo made a fifty-fifty joint venture with them [for ecommerce ventures in Asia]. The Rocket model is very interesting to me. They bring into a region something that has worked elsewhere, and then they recreate. But it can’t only work like that, and they know there has to be some form of localization. I’d like to play a part in that.

Winning the crowd

The Indosat Wireless Innovation Contest (IWIC) is another one of Rusli’s competitions for local technopreneurs. Each year, the winners get prizes and the chance to incubate their companies in Indonesia or abroad. Participants are not restricted by age or education, so long as they have a disruptive IT concept for the Indonesian market and a solid prototype.

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