BRI Ventures plans to back growth and late-stage startups by the allocation of the fund into its new CVC arm

Indonesia’s state-owned bank Bank Rakyat Indonesia (BRI) has shared that it plans to inject up to US$250 million into its new corporate venture capital (CVC) unit BRI Ventures, to back growth and late-stage startups.

To lead the operation is Nicko Widjaja, the former CEO of MDI Ventures, the CVC arm of government-owned telco Telkom Indonesia, various media reported.

Widjaja has built a reputation spanning four years of venturing with MDI Ventures and is considered as one of the early movers in Indonesia’s VC industry. He also has launched his own fund called Systec Ventures.

In 2011, Widjaja joined Telkom Indonesia initially as the director of the firm’s Indigo Incubator and later MDI Ventures in 2015 as CEO. In less than three years, MDI’s US$150-million inaugural fund has backed more than 35 startups and landed five exits from its portfolio, three of which happened just this month.

BRI Ventures said that it has received an initial fund of US$100 million from the balance sheet of its parent company.

Also Read: MDI Ventures leads US$10M post-Series A funding round for Australia’s Whispir

Back in May, it was reported that BRI was in the process of setting up a venture investment fund of up to US$100 million with the assistance of MDI Ventures, who will help out the bank in setting up the structure and management team of the ventures.

The establishment of BRI Ventures makes BRI the third Indonesian bank to set up a venture capital arm, right after another state-owned lender Bank Mandiri, who set up its VC organically, and private lender Bank Central Asia.

BRI spreading out to venture capital by acquiring an existing VC firm called Bahana Artha Ventura (BAV). In November 2017, BRI initially acquired a 35 per cent stake in BAV before gradually increasing its stake and eventually acquiring 97.61 per cent of the company in December last year.

BRI Ventures, who claims to be an “independent entity with its own funding processes”, had said that it will not only target fintech like the other banks that venturing out.

“So far, we are seeing that ‘offline’ is becoming the new sexy. Take, for example, the rise in Warung Pintar, Fore Coffee, Payfazz which have taken strides in the offline sector. Imagine the possibility to scale up fast with technology. I believe through BRI Ventures, we will see more verticals powered by fintech such as retail, education, and healthcare,” said Widjaja.

Also Read: Indonesian state-owned bank BRI to acquire a venture capital firm, gets US$37M ready

At BRI Ventures, Widjaja is joined by former MDI head of investment William Gozali, who will take up the position of BRI Ventures’ VP of Investments.

According to a source, one of the first deals to be inked by the VC is likely to be an acquisition of Finarya, the company operating the newly launched mobile payment platform LinkAja.

The company provides a server-based e-money service which merges the existing e-wallet platforms of telco firm Telkomsel, and lenders Bank Mandiri, BRI, and BNI. BRI, along with other six state-owned firms are set to acquire a stake in the company.

With a fund up to US$250 million, BRI Ventures’ debut fund is said to be the largest venture fund based out of Indonesia to date, and one of the largest in the region.

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Image Credit: MDI Ventures

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