Indonesia’s state-owned bank Bank Rakyat Indonesia (BRI) officially launched its corporate venture capital (CVC) unit BRI Ventures. The new venture will allocate IDR 3.5 trillion (USD 250 million) to back growth and late-stage startups, according to Daily Social.
BRI, also the oldest bank in the country, entered into the venture capital field by acquiring a VC firm called Bahana Artha Ventura (BAV) in November 2017. BRI initially acquired 35% in BAV before gradually increasing its stake and eventually taking 97.61% of the company in December last year.
BRI appointed Nicko Widjaja, former CEO of MDI Ventures, to lead the new venture unit. Widjaja has deep expertise in managing venture capital firms. Under his leadership, MDI Ventures has invested and accelerated 32 startup companies from ten different countries.
Earlier in July, MDI Ventures launched its Singapore office and secured an operational permit from Monetary Authority of Singapore (MAS).
Former MDI head of investment William Gozali also joined Widjaja at BRI Ventures. Gozali will take the position of VP of Investments.
Widjaja’s involvement with BRI goes back to 2016, when his team at MDI worked on Mandiri Digital Incubator, a program initiated by Indonesia’s state-owned Bank Mandiri.
The project served as a validation point for MDI and the firm has worked since then with several other state-owned corporates, especially to support their digital initiatives and to help them build venture capital arms.
“In early 2018, we started the discussion with BRI about the creation of the venture arm, and I was in talks to lead the newly established firm,” Nicko Widjaja told KrASIA.
With his new role, Widjaja aims to develop BRI Ventures to become the leading venture capital in the region, focusing on fintech and its ecosystem. Widjaja will also continue his work for MDI Ventures as an advisor.
“I must admit it’s tough to not being involved with MDI on a daily basis, especially now with five exits under our portfolio. Our internal rate of return (IRR) is at 40% this year, which increased from 28% in 2018,” Widjaja continued.
“I will be advising for MDI from time to time; after all, BRI Ventures and MDI Ventures are both created under the state-owned umbrella. It should be in close collaboration together.” Widjaja said.
BRI Ventures is also eyeing other sectors. Particularly, Widjaja said that he has a significant interest in the new retail industry, as it will be the third wave of Indonesia’s unicorn.
“We are seeing that ‘offline’ is becoming the new sexy, specifically with Indonesia. Take, for instance, startups like Warung Pintar, Fore Coffee, and Payfazz, who had been making strides in the offline sectors. Imagine the possibility to scale up fast with technology, and BRI will be the leading bank to capture this next wave of the boom,” he concluded.