China’s Venture Capital Firms Flock to Indonesia as Relations with India Sour

KOMPAS.com – Deteriorating India-China relations over border conflicts have created new opportunities for Indonesia to attract new investments from China.

There are reports of Chinese investors facing complications in putting their money in India and business relations have severely soured that venture capital firms have found it impossible to invest in any company in the South Asian country.

This has presented Indonesia with the advantage of luring in Chinese investors that have abandoned ship on the Indian economy.

Chinese venture capitalist Shunwei Capital has voiced their active interest in exploring options for investing in Indonesia.

Read also: Google, Temasek Now Shareholders of Indonesian E-commerce Unicorn Tokopedia

Founded by Xiaomi founders, Lei Jun and Tuck Lye Koh, Shunwei Capital owns $3 billion or Rp 42.3 trillion in operational funds.

It has decided to maintain its existing investment portfolio in India without further expansion.

In Indonesia, Shunwei Capital has injected funds into a handful of start-ups including Evermos in e-commerce and Pahamify in edu-tech.

Another Chinese firm looking to diversify its investment in Indonesia is BAce Capital, part of Ant Group, which was established by Alibaba Group founder Jack Ma.

Read also: Alibaba Cloud to Build Indonesia’s Third Data Center in 2021

A source well-versed on the issue said that BAce Capital will not actively invest in the Southeast Asian country as it views the market as underdeveloped.

An unidentified venture capital company has concurred the need for more serious attention given to Indonesia following India’s move to cut off investors from China.

As reported in the Financial Times and summarized by KompasTekno, Chinese investors have poured generous amounts of money into India’s start-up companies such as Paytm, Zomato, and Byju.

Read also: Pandemic is Opportune Time for Digital Start-Ups in Indonesia

However, conflict issues with China have jeopardized the thriving business relations that led to the eventual cut-off of Chinese investors from the South Asian nation.

This has resulted in several investors cutting the cord on crucial funding for India’s start-ups such as Zomato which recently received an injection of $100 million from Ant Group.

A further illustration of growing tensions between the two nations is seen in the app creation sector where India recently blocked 43 Chinese-made apps.

(Writer: Wahyunanda Kusuma Pertiwi | Editor: Reska K. Nistanto)

Source: https://tekno.kompas.com/read/2020/12/01/12080097/konflik-politik-dengan-india-bikin-investor-teknologi-china-pindah-ke-indonesia