MDI Ventures, a USD 790 million global multi-stage VC backed by state-owned Telkom Indonesia, has teamed up with tech investor Finch Capital to launch a new early-stage investment fund called Arise, with a target of USD 40 million in assets under management.
The fund will invest from USD 250,000 to USD 3 million into post-seed to pre-Series A startups in the region. “We plan to do 20 deals in the next two years,” Arise partner Aldi Adrian Hartanto told KrASIA. “The startups need to have high margin and liquidity, low fixed cost and low people-centric, and it also should have an asset-light model.”
Hartanto said the firm is looking for the “next generation of founders,” founders who have experience in establishing, growing, and scaling tech companies as executives, together with “domain-expertise” co-founders, or people with deep conventional business background experience.
Investments into early-stage companies in Southeast Asia are slowing down due to the pandemic, being considered as too risky for many investors. A recent report by Cento Ventures shows that local tech investing fell to USD 5.6 billion in 2020, a 13% drop compared to the same period in 2019.
“We believe pre-Series is the right sweet spot, given the company’s initial tractions. We understand which are the things that we can support and adjust to accelerating product-market fit through our thesis-driven playbook learned from Silicon Valley, Europe, and Asia, where both MDI and Finch have actively invested in,” Hartanto said.
After Arise makes an investment, it will “blitz-scale” the startup’s growth with the right go-to-market partners such as state-owned Telkom Group, and other large corporations, especially financial institutions, to minimize the risk, he said.
Startups will enter Telkom’s Indigo Nation incubator to find the right business model. Arise will serve as step two of the journey: MDI Ventures helps the startup to get plugged into Telkom Group’s various businesses, while Finch does the same with its roster of blue-chip corporate partners. From there, the startup can fundraise from MDI’s Centauri Fund at the Series A stage, MDI Ventures at Series B and later stages, and finally, see a meaningful exit via acquisition or IPO.