Mandiri Capital Will Seek 3 Fin-tech Startup to Invest in 2020

Mandiri Capital Indonesia plans to inject fresh funds into two to three startups by 2020. However, the CEO of Mandiri Capital Indonesia, Eddi Danusaputro, said that he had not yet found the right company to receive the capital. “We invest in around two to three startups,” he said.

He said that there are funds around IDR 50 billion for new investment. At present, he said, his company has injected capital into 13 startups, including Amartha, PrivyID, Moka, and Investree. Next year, Eddi said his company will continue to invest in financial technology.

He said there were at least three sectors that become the focus of his company. Until now, however, there were no appropriate candidates. First is the digital insurance sector as known as insur-tech. “It’s been four years we have been looking for it but we haven’t met yet,” he said.

Eddi stated that the reason is not that they don’t exist, but they just don’t yet match. He said the sector was needed to help Mandiri find innovative insurance startups in terms of products and processes, not in the marketplace. Then, what are the other sectors being targeted?

Mandiri Capital Targets Fin-tech from Three Different Sectors

Moreover, Mandiri Capital Indonesia is also targeting the fin-tech remittance sector to help Indonesian workers abroad who want to send money to the country. “Why? Because we are SOEs, we have the spirit and duty to prosper the nation,” Eddi said.

However, similar to the first sector, he said that his company has been looking for the last two to three years but has not found it yet. He said it was not easy to help overseas workers to send money to Indonesia.

The reason is that not all migrant workers have a bank account. Besides, the cost is also expensive. Not to mention if the recipient does not have a bank account or lives in a remote area. So, startup companies should think about cash in and cash out cases.

Another sector that is also sought by Mandiri Capital, Eddi said, is fin-tech in the field of wealth management or good Robo advisory. “So, we are always looking for two plus one areas that are important.” However, the company not yet found any matched startups.

Mandiri Capital Recently Injected Capital to Halofina

Previously, Mandiri Capital Indonesia and Finch Capital agreed to inject Pre-series A funding into Halofina, a fin-tech platform focused on Digital Financial Advisory & Wealth Management. But, Eddi declined to specify the amount of injection of fresh funds given to Halofina.

On the other hand, he explained that in the venture capital industry, Pre-series A funding alone had an investment range of USD 1 million to USD 5 million. Mandiri Capital itself is a subsidiary of Bank Mandiri. Thus, the investment is supposed to benefit the Mandiri Group too.

Eddi also shared he did not want to speculate with large-scale investment for business development. He believed the method of burning money that is common in startup businesses is prone to losses. “It’s not the bubble startup industry, but its valuation. In some cases, it doesn’t make sense,” he said.

Instead, Eddy explained that the most important thing in running a startup business is being realistic. He admitted that Capital Mandiri had invested in some startups, but not all of them were suitable. Nevertheless, he continued, the method of ‘burning money’ also has a positive side.

He said that he once went on an internship to a startup that was not suitable because the valuation was not matched. Eventually, it was canceled. “In my opinion, startups need to be careful with valuation,” he added. Boosting valuations with a money-burning strategy, he said, is not sustainable.