Jakarta-based Indogen Capital bases its investment strategy on helping foreign startups expand to Indonesia through partnering, sometimes co-investing, with the companies' investors. Indonesia's large population and fast-growing middle class and internet penetration make the market very attractive to tech startups in the Asia-Pacific region.
One example of such startups is Venteny, a Philippine fintech-insurtech platform that helps call centers create and manage benefits and microfinancing for their staff. The company was eager to enter the Indonesian market, and Indogen put them in touch with one of their two LPs from its first fund. The initial trials ended in failure, however, because Venteny did not yet understand what Indonesian employers needed.
“In the Philippines, competition between call center companies is fierce, and Venteny helps companies provide incentives to retain employees. For Indonesian clients, however, the emphasis is what Venteny can provide to the employers,” Chandra Firmanto, Managing Partner of Indogen, explained.
Venteny eventually realized that Indonesian employers needed help in reducing the cost of providing insurance coverage for employees. With this in mind, Venteny created an extra feature in their offering: free health insurance from Generali. Combined with their already attractive microloan and benefit programs for employees, Venteny eventually managed to impress the LP and expand further into the Indonesian market, Firmanto said, speaking in an interview via Skype.
So far, Indogen has managed to land three exits: precision medicine development firm Clearbridge Health and coworking space management firm Spacemob from Singapore, and Indonesian cashless payment device provider Aino.
Clearbridge listed on the Singapore Exchange in December 2017 while Spacemob was acquired by WeWork as part of the latter's Asia-Pacific expansion strategy the same year. More recently, in August 2019, Indogen sold half of its stake in Aino after the company raised funds from TIS Inc., a Japanese IT services firm.
Firmanto had much to say about Aino. The company, which develops smart ID cards and cashless payment devices, has a proven track record in working with government agencies and private companies. For example, Aino won the tender to develop the prepaid card payment device used at Indonesia’s toll highways. Prior to receiving investment from TIS, Aino also got an investment from another Japanese firm, NTT Data, which also develops transit prepaid cards.
“Aino’s greatest strength is developing an engine that can accept both e-money [prepaid cash cards] and QR-based payments in one terminal/device,” Firmanto said.
Aino’s device, he added, can accept any of the major e-money cards and QR-based payment apps, as the company holds a National Payment Gateway license. Such a system is already being used by Warung Pintar, the East Venture-incubated startup that aims to digitize traditional corner shops.
Indogen's exit from Spacemob proved more of a mixed bag. Without disclosing the value of Indogen's stake sale, Firmanto said that the VC received half of the sale proceeds in cash; the other half was in WeWork equity. Subsequently, when WeWork was aiming for a $48bn valuation via IPO, Indogen passed up the opportunity to sell their shares at $78 apiece.
“If we had made our exit then, we would have made seven to eight times our investment [in returns],” Firmanto said.
He is still looking forward to the next opportunity to sell those shares, however, with the view that WeWork could be valued at up to $15bn after IPO.
“I think it’s doable. The company has made many improvements, and some of their APAC [Asia-Pacific] units are actually profitable; they’re being managed by the ex-Spacemob people.”