On Thursday we reported on the formation of the Indonesian Venture Capital alliance, formed by eight venture capital firms operating in the country. Representatives of the firms met that day to discuss the state of tech entrepreneurship in the country and to formalize the alliance. We contacted Sebastian Togelang, head of Mountain Southeast Asia Ventures who was voted as the alliance chairman to find out more about the initiative.
It’s worth noting that he asked to make it clear that his answers are not representative of the alliance. “We cannot give an official answer on behalf of the alliance since the vision and mission have not been defined yet.”
What do you think about this alliance of venture capitals? Is it really necessary?
I think there are some benefits to this alliance.
VC as a part of the digital ecosystem, directly/indirectly support the Tech Startup growth in Indonesia. A lot of the successful business groups in Indonesia come from traditional industries. These conglomerates as well as the Indonesian Government are relatively new to this fictive digital business world. Until now unfortunately it’s still hard for startups to get series A, B funding from Indonesian Investors. If the VC ecosystem grows supposedly, it can help the startups to grow as well.
In addition, the alliance can also support the synergy among the VCs in Indonesia, such as Co-Investments, knowledge and technology transfer, etc. Besides that this alliance encourages the VCs to work together and support each other.
Is it really necessary? We will see, but as mentioned I think it can help the ecosystem. If not, at least we have a reason to meet and chat.;)
What can the alliance do about the investment scene in the country?
We can try to educate the investment scene. The more traditional investors understand how interesting the digital business is, the more they will invest in it and help to grow of the ecosystem. Besides that we can help giving input to local and international investors how to best invest and capitalize in Indonesian digital culture, while at the same time prevent the onset of a bubble but also avoid the sector being undervalued.
What benefit will this bring to the internet business landscape in Indonesia?
My hope as mentioned above is that we can help the growth and stabilize the digital business landscape, by helping startups that need capital injection to grow healthy. Most importantly for me is to support quality growth not just in terms of quantity.
Besides that I also hope we can organize meetings with other industries in order to exchange ideas on how their respective industries and businesses can benefit using digital technology/services.
What would you say to skeptics that might consider this alliance a collusion among investors to undermine local startups?
At the moment I still don’t see the advantages for the VCs to undermine local startups. VCs are considered as successful if they can enhance the value of a startup as high as possible and trade it with a good price, so why undermine them? Besides that from the first meeting with the first 8 VCs, I can sense that there is a lot interest from all of us to support the ecosystem. So I am not pessimistic about this.
How does this alliance differ from something like say, an association?
Again we didn’t define our vision and mission yet, so I think best to answer this after.
[Header image from @avciiorg]
