As the final panel for the morning at Startup Asia Jakarta 2012 saw moderator Vanessa Tan asking a group of overseas investors about their experiences and thoughts on the Indonesian market. Panelists included (pictured left to right):
- Takeshi Ebihara, Batavia Incubator, Rebright Partners, Inc.
- Takahiro Suzuki, CyberAgent Ventures
- Alexander Pavlov, ru-Net
- Tatsuo Tsutsumi, GREE Ventures
#12:31: (On Indonesian market potential) Ebihara: Why does everyone ask that question? The economic data has a really sexy momentum and its very big and growing fast.
Alex: I think it’s all about replication, Indonesia is a huge market, but at some point in time it will have several multi-million dollar startups, that will be worth investing in.
Tatsuo: GREE is a social gaming company, but we’re interested in other online businesses, of course.
#12:34: (On investments so far) Alex: Due to the structure of our fund we’re very flexible. For ido we’re looking for local partner, not early stage deals. But 5 to 15 million dollar investments. It seems to me that capital flows here as such that securing follow up investments will be a challenge so our funds should be enough to sustain a company for a long time. … We invested in VMG group in Vietnam, and with regards to Indonesia we should have some news later in the year, for sure.
#12:38: Takahiro: If there are no startups in the fields we are focused on we’re also thinking about creating new businesses with local entrepreneurs.
#12:39: Tatsuo: In Indonesia there are few venture capitals here. Our fund is only 25 million dollars, we usually invest 300K to 1m (US) in one transaction.
#12:40: Takahiro: We hosted a networking event and we’re hoping local entrepreneurs can find new ideas for their business. Next time we hope to do another to help the startup ecosystem.
#12:45: (On difficulties to look out for in Indonesia) Ebihara: Here in Indonesia the microeconomics and politics are well managed, so for me personally I don’t have any difficulties. The growth momentum here is great, even totally different from China or India.
Alex: In any developing country when doing a late stage deal, legal things are important. Shareholders deal need to enforce all the provisions, so establishing a legal structure is quite tough, like many SEA countries. But there are ways to overcome this. I’d like to see a founder looking to build a billion dollar company. A lot of talent is emerging here, and I hope we can see some entrepreneurs step into this ‘billion dollar’ mindset. But if you look at Tokopedia, they are developing very nicely and I think they will have a very nice future down the road.
Takahiro: There are two reasons why we invested in Tokopedia. Founder is passionate and clever and has what it takes to win in this market. And e-commerce and C2C will definitely be big in this market.
Tatsuo: We haven’t yet invested in Indonesian companies, but we’re in the signing process with one. In the near future I hope we can announce our deal.
#12:55: (Are Indonesian entrepreneurs ready for investment) Alex: It’s hard for me to imagine that any Indonesian company could absorb 100 million dollars now. It’s not about raising the money, but rather what you plan to do with it. You should have a basic understanding of the route you are following. Some companies can absorb up to 15 million, and I would say maybe this is the most in this current Indonesian market. But I’m sure this is what is needed to create a perfect storm, and after this kind of initial investment, I am sure more will come.
Ebihara: I think entrepreneurs are ready. There is much variety in tech skill. I’m the only one on this panel for seed stage. So the most important is the team, the passion. One startup we invested in knew each other from childhood and their bond was good. The bond is very important, and the trust. To return to your question, are they ready for investment? It depends. For example if some are trying to do price comparison and they aren’t familiar with Priceline.com, I would say to them to go home and study, of course those kind of people are not ready. But it depends.
This is a part of our coverage of Startup Asia Jakarta 2012, our startup event running on June 8 and 9. You can follow along on Twitter at @startupasia, on our Facebook page, on Google Plus, or via RSS.