The disruptive era has been driven not only by the startup industry. In recent years, a number of large-scale corporations have taken part in developing the digital ecosystem in Indonesia.
Moreover, innovation development within the scope of the corporation or corporate innovation will come back to its main goal, a sustainable business.
The year 2019 highlighted some strategic steps with various instruments, from internal innovation incubation, collaboration with startups, and the rise of venture capitals.
DailySocial summarizes the most engaging corporate actions of some sectors within the year of 2019 as follows:
A synergy of state-owned e-money products
Last year begins with Telkomsel’s e-money service transformation, Tcash, to LinkAja. This is said to be the former SOE Minister Rini Soemarno’s initiative who wants to put state-owned e-money companies altogether into one platform.
Tcash is considered to have the most ready ecosystem at that time than any other SOE e-money, therefore, It was designated as an “embryo” for the LinkAja platform. This is quite a surprising decision since Tcash plans to become an agnostic e-money service and spin off from Telkomsel in the mid-2018.
Meanwhile, LinkAja has been announced and started rolling in February. In fact, it was officially launched in the middle of the year due to the long-await for the integration of all SOE e-money to be completed.
It is to be highlighted that LinkAja is the result of a joint venture of state-owned companies in which 25% of the shares owned by Telkomsel, 20% each for Mandiri, BRI and BNI, BTN, Pertamina with 7%, and Jiwasraya Insurance also involved with 1%.
Prior to this, LinkAja positioned itself as e-money for daily basis. Therefore, this joint venture – to be followed by other shareholders – is considered to fasten the acceleration for the company’s use case, such as transportation and gasoline purchases.
Collaboration and Innovation
Innovation and collaboration between corporations and startups have made the news in 2019. It indicates a number of business sectors have realized the power of inclusiveness towards Indonesia’s digital business development.
As an example, Gojek officially partners with Indonesian Railways (KAI) to support the integration of digital ecosystems and railroad services through orders and payments in one transaction. In this case, Gojek is the first and last-mile provider, while KAI acts as the middle mile provider.
Next, BRI kicked off the market through its collaboration with Traveloka through the “PayLater Card” launching. This co-branding partnership allows users to transact at offline and online merchants in 53 million locations worldwide and receive payments by VISA.
In late 2019, BRI is to increase its digital service portfolio by launching a BRI Ceria virtual credit card that provides loans starting from Rp500 thousand to Rp1 million. The app-based service aims for BRI customers in the underbanked segment.
In terms of telco, Telkomsel initiated another breakthrough by launching the first digital app-based cellular service product by.U. It’s called digital-based for all activities of purchase, registration, and use are fully carried out in the application.
It was internally incubated and developed through MVP, the by.U service has become Telkomsel’s strategic “weapon” to win the market in the digital era. In fact, by.U is targeting gen Z for their digital literacy and unwillingness to be “regulated” for data packages.
The rise of Corporate Venture Capitals
2019 highlights the aggressive penetration of Corporate Venture Capital (CVC). In our observation, there are four new CVCs established to capture great opportunities in the Indonesian digital industry. They include Amatil X (Coca Cola Amatil), Telkomsel Mitra Inovasi / TMI (Telkomsel), BRI Ventures (BRI), and Sarana Papua Ventura (BTN).
Furthermore, DailySocial also highlighted Nicko Widjaja‘s transfer from MDI Ventures to be the head of BRI Ventures. Nicko’s appointment as CEO is expected to bring a new success story in the coming year.
Broadly speaking, each CVC targets a different business vertical, depending on the demand and values of the company’s business development. Likewise, the funding stage. For example, TMI is currently aiming for early-stage and BRI Ventures will focus on growth and late-stage startups.
In addition to the CVC, Telkom Group has recently added more to its managed funds by launching the Centauri Fund. The new strategy is a joint venture between the telco giant with KB Financial Group, which is one of the largest banks in South Korea.
Expecting the next strategic step in 2020
Through the summarize of various corporate actions above, we can draw a common thread that inclusiveness will be the main key for players – whoever are both corporations and startups – in driving the development of the digital ecosystem in the future.
Collaboration will be more aggressive and there are more innovations to arrive. A number of Indonesian corporates have realized the power of innovation and digital transformation. Some of those, such as BRI and Telkomsel, have prepared themselves to start a new chapter in 2020.
Moreover, in line with the more mature startup ecosystem, the VC industry will be more selective for its investment. The investment climate is predicted to increase. However, we are likely to see a decrease in the initial funding.
For some reason, both CVC and VC will be more focused on growth and late-stage funding. Aside from minimizing risk — learn from the previous years — startups must have clear traction, scale-up, and monetizing plans.
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Original article is in Indonesian, translated by Kristin Siagian
