Indonesian State Firms Invest in Local Startups

JAKARTA, KOMPAS.com – Five Indonesian state firms have been venturing into local startups amid an increasing number of foreign investors who are keen to invest in the country’s tech giants.

The five state firms include two telecoms operators namely PT Telkom Indonesia and PT Telkomsel, as well as three banks such as PT Bank Rakyat Indonesia, PT Bank Mandiri, and PT Bank Negara Indonesia.

Arya Sinulingga, an aide to State-Owned Enterprises Minister Erick Thohir, said that the move began after foreign investors dominated top tech startups in Indonesia.

Also read: Indonesia Startup Buys TikToks AI Tech from ByteDance

“We are upset because Gojek [ride-hailing and payments firm], Tokopedia, Bukalapak [e-commerce companies] are dominated by foreign investment, no local investors,” Arya said during an online discussion held on Wednesday, October 6.

He further added that with the development of the current business models, startups are thriving in Indonesia and some state firms can support them financially.

“State-owned enterprises have the potential to go into, that’s the reason why Mr. Erick says that don’t be upset when foreign investors dominate our startups. State firms must set foot in [startup company],” he said.

Also read: Indonesia’s Gojek, Tokopedia Merge to Create Giant Tech Group

Although some companies may think that there is a high potential for losses when investing in startups, foreign investors are aggressively investing in many Indonesian startups.

“Taking an example, why does Telkomsel [Indonesia’s largest telecoms operator] invest in Gojek? It is because they have to. If foreign companies invest their money there, why don’t we?” he said.

The state firms will not only focus on providing funds in the fintech or e-commerce startups but also in edu-tech. “We did the selection process carefully,” Arya said.

(Writer: Rully R. Ramli | Editor: Bambang P. Jatmiko)

Source: https://money.kompas.com/read/2021/10/06/054000226/stafsus-erick-thohir-bumn-ramai-ramai-investasi-di-startup-karena-asing-gencar.