Pandu Sjahrir is a familiar name in Indonesia’s energy and tech industries. Born into a family of businessmen, Sjahrir started his career in Indonesia by managing Toba Bara Sejahtera, one of the biggest mining companies in the country.
In the past five years, Sjahrir has been actively investing in tech companies. He is a board member of Gojek, as well as he is chairman of the Indonesia operation of Sea Group, the parent company of e-commerce firm Shopee and game developer Garena. Sjahrir is also a managing partner at Indies Capital, a Singapore-based alternative asset manager that has invested over USD 1 billion on behalf of institutional investors and private clients since its foundation in 2009.
Sjahrir founded his own venture capital firm in 2018. Agaeti Ventures has supported various startups including logistics company Kargo, fintech firm Akselaran, and online catering startup Yummy Corp.
Earlier this year, Agaeti Ventures merged with Convergence Ventures and formed a new entity called AC Ventures. By combining the experience and networks of the two firms, AC Ventures wants to form the largest local venture capital investment partnership in Indonesia, it says.
The firm recently announced that it has raised USD 56 million in the first close of its USD 80 million fund, aiming to invest in 25 to 30 Indonesian tech startups over the next three years. AC Ventures plans to complete the round in mid-2021, Sjahrir told KrASIA.
In July, Sjahrir was appointed as a commissioner at the Indonesian Stock Exchange (IDX), with the mission to foster public trust, especially among younger people. He is also working to attract tech startups to go public, Sjahrir said.
KrASIA recently talked to Sjahrir about the investment climate and trends among tech companies in Indonesia.
KrASIA (Kr): You started your career in Indonesia in the coal and mining industry. What lured you to the realm of tech investments?
Pandu Sjahrir (PS): I returned to Indonesia in 2010 after many years in the United States. My family business is in energy and I was asked by a family member to handle a new coal mining company called Toba Bara. My true passion has always been investment, so I told my family that I wanted to bring Toba Bara public quickly, which I succeeded in doing within 2.5 years. After that, I decided to start investing again at a small scale, with my own money, without using a third-party fund.
Back then, the tech industry was starting to take off in Indonesia and Southeast Asia, and I happened to know the founder of Sea Group, Forrest Li, as he was my senior at Stanford University. After many discussions, I decided to join and invest in Sea Group in 2014. A year later, I helped set up Shopee in Indonesia. From there, I continued to be active in tech investment and founded Agaeti Ventures in 2018.
I think there is a similarity between the energy and tech industries. In the energy or industrial sector, we have many stakeholders such as the government and state-owned companies, so we need a lot of engagement and good bureaucratic skills. The tech industry today is starting to show similar needs as the ecosystem is getting more mature and involves more stakeholders.
Kr: Agaeti Ventures already had strong portfolios with a 48% end of deal return rate. Why did you decide to merge with Convergence? What is the ultimate goal?
PS: I’ve known Michael Soerijadji [founder of Agaeti] and Adrian Li [founder of Convergence] for a very long time. In fact, Adrian was my classmate at Stanford University, so I really understand his character and we have similar ways of thinking. To me, this is important because investment and asset management business require mutual trust and synchronization of its principals.
By merging Agaeti and Convergence, we have a better market positioning, with a portfolio of 80 companies. All of us have entrepreneurial backgrounds with good track records, and we are well-known in the industry. The venture capital business is fairly new in Indonesia, so we want to form a well-established institution to help tech companies grow faster and develop better.
Kr: You have invested in companies across different sectors, mainly e-commerce, fintech, and tech-driven micro, small, and medium-sized enterprises. Is there any particular sector you’re personally interested in?
PS: In addition to the big sectors like e-commerce, fintech, and logistics, I’m also interested in niche industries such as aquaculture and agriculture. Indonesia has a huge opportunity, not many countries have the same potential as us in these areas. AC Ventures has invested in fishery startup Aruna earlier this year, and we’ll complete another investment in this sector soon.
Kr: Indonesia is said to be on the verge of a recession. How do you see the investment climate in the country?
PS: Indonesia has enormous investment potential—the largest in Southeast Asia. We have the biggest market and our government is quite steady. In addition, we now have the omnibus law that I am sure it will attract more investment. I think this [omnibus law] is a breakthrough, a game-changer, where the government simplifies many complicated regulations in order to reach a positive investment list.
Of course, every new policy will draw criticism. I think the law needs to be better explained so people will understand it better. Indonesia’s economy has changed a lot as we no longer depend on the manufacturing business only. We are competing globally, and more investments can bring more jobs which will lead to a better economy.
Kr: As a commissioner at the IDX, what’s your view on the likelihood of local tech companies being listed in the near future?
PS: In the US, out of the 10 largest publicly traded companies, six of them are tech firms, and China also presents a similar trend. Meanwhile, in Indonesia, the stock exchange is still dominated by sectors like telco and banking. I believe that when one big tech company enters the stock market, other startups will follow quickly.
Tech industry is growing very rapidly in terms of overall revenue and profit. If a company like Gojek or Grab lists on IDX, they would immediately enter the LQ45 list, an index consisting of 45 stocks that have high liquidity and market cap, and are supported by good fundamentals and a high level of compliance.
I always encourage tech companies to consider listing in Indonesia, showing them that the market projection is positive. We already have some discussions and there are some technical matters that tech founders have asked me. We at IDX are trying to support them as much as we can.
Kr: How do you think the COVID-19 pandemic is affecting companies’ interest in going public?
PS: I believe the pandemic is encouraging more companies to enter public equity listings, which can be seen in the US or in China. Indonesia also shows a similar trend as we’re seeing an increase in the number of companies going public this year. Hopefully, tech startups will follow suit soon.
Sea Group, whose stock has performed well this year, is a good example for other tech companies. The pandemic is one of the factors driving Sea’s performance, due to increasing e-commerce transactions and surging demands in video games. Sea went public in 2017 and the first year and a half was quite challenging. No one knew about e-commerce in Southeast Asia, so it took some time to educate the market. I think now is a much better time for tech companies to go public as there is already a success story and the market is quite supportive.