Indonesian Government-Backed Merah Putih Fund Raises $300 Million for Soonicorn Startups

The Merah Putih Fund, an Indonesian government-backed venture capital firm, has successfully secured $300 million in the first phase of its inaugural fund. The initiative brings together five state-owned venture capital companies, each with a corporate focus. 

The companies include Mandiri Capital Indonesia, MDI Ventures from Telkom Group, BRI Ventures, BNI Ventures, and Telkomsel Mitra Inovasi. Also, Eddi Danusaputro has been appointed as the PMO Chairman of the Merah Putih Fund.

Located within the Telkomsel Smart Office in Jakarta, this collaboration marks the official launch of the Merah Putih Fund. This venture capital entity is expected to play a role in identifying and investing in promising startups in Indonesia. 

The inception of the Merah Putih Fund follows President Joko Widodo’s initial announcement in December 2021. The venture capital initiative addresses Indonesia’s soonicorn startup scene, focusing on companies seeking series C and series D funding rounds. 

To qualify for funding, target startups must be Indonesian-founded enterprises operating within the country’s borders. Additionally, they must outline a clear roadmap for either an initial public offering (IPO) in Indonesia or a merger with another Indonesian firm. With this approach, the initiative plans to nurture homegrown innovation and accelerate the growth of Indonesia’s tech ecosystem.

Eddi Danusaputro, PMO Chairman of the Merah Putih Fund, underlined the fund’s primary focus on soonicorns, emphasizing a commitment to supporting startups on the verge of achieving unicorn status. 

The fund’s mission is not directed toward unicorns or decacorns but rather startups that exhibit strong potential to become unicorns in the near future. With governance structures designed in collaboration with independent entities and a commitment to Good Corporate Governance, the Merah Putih Fund seeks to provide the necessary financial backing and resources for these promising startups. 

The fund prioritizes the legal compliance of startups in its portfolio and places significant emphasis on conducting thorough analyses before injecting funds into potential candidates. Rosan, a key figure in this initiative, stressed that the fund’s investments extend beyond mere comfort and require a comprehensive understanding of the companies’ bottom lines.

Furthermore, startups seeking funding from the Merah Putih Fund must meet specific criteria, including a “pre-money valuation of US$200 million.” Eddi Danusaputro, CEO of Mandiri Capital, emphasized that, given the fund’s management by state-owned enterprises, early-stage companies are considered too risky. 

The fund has obtained the necessary license from Otoritas Jasa Keuangan, Indonesia’s financial services authority, further solidifying its legal standing. Looking ahead, the Merah Putih Fund has plans to secure additional funding from other state-owned enterprises for its second close, with a target size of US$300 million.

Securing its regulatory footing, the Financial Services Authority (OJK) granted the Merah Putih Fund a license on July 18, 2022. 

“If we look at the potential of Indonesia’s digital economy today based on a report of approximately US$ 77 billion in 2022, the figure will increase to US$ 130 billion in 2030,” Rosan said

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