Singtel Indonesia associate Telkomsel, partners create US$40m fund for start-ups

SINGAPORE - Telkomsel, Singtel's regional associate in Indonesia, has created a new fund with an initial budget of US$40 million, in collaboration with Telkom's corporate venture capital (VC) initiative MDI Ventures and Singtel's corporate VC arm Innov8.

The move will also involve the establishment of a fully owned subsidiary called Telkomsel Mitra Inovasi (TMI), a corporate venture arm which will forge partnerships with start-ups. The subsidiary will also be responsible for investment activity, as well as collaborations across Telkomsel's various business units.

The ensuing digital transformation is to accelerate development of new services, improve customer experience and business process optimisation, the Indonesian telco said.

TMI will invest in "young, promising companies" and help accelerate their growth by providing access to Telkomsel's ecosystem, assets and expertise.

Telkomsel president director Ririek Adriansyah said the partnership with MDI Ventures and Singtel Innov8 through TMI will allow Telkomsel to have a more agile and reliable engagement model for start-ups seeking access to the telco's strategic capital and offer better user experience by forging an alliance.

"Telkomsel expects TMI to act as a platform to access the range of exciting, emerging opportunities in the technology sector," he added.

TMI CEO Andi Kristianto said that the company would work closely with start-ups to establish a strategic and operational plan to maximise long-term value. It would also provide market insights from both an enterprise perspective and consumer perspective in Indonesia.

"It also gives a leg-up in terms of corporate awareness in a digital business ecosystem," Mr Kristianto said.

MDI Ventures CEO Nickco Widjaja said that the corporate venture arm has been growing from an experimental corporate VC to a corporate growth vehicle for Telkom Indonesia.

It had one IPO (initial public offering) exit in the Tokyo Stock Exchange and two trade sale exits within three years, contributing to the top line and bottom line for Telkom Metra Holding, Mr Widjaja said.

Meanwhile, Singtel Innov8 CEO Edgar Hardless said that with more start-ups increasingly looking to expand into South-east Asia earlier in their journey, Telkomsel, with its strong local market preserence, is "well positioned" to help these start-ups gain access into Indonesia.

The move builds on Telkomsel's existing work with start-ups, which has worked with over 5,000 start-ups across 20 cities in Indonesia through its NextDev programme. The telco also launched Telkomsel Innovation Center in 2018, an Internet of Things (IoT) incubator helping start-ups execute go-to-market strategy and technology improvement.