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Ridzki Syahputera is the corporate development manager atwhere he focuses on supporting their portfolio companies post investment.
Here, he shares his firm’s post-investment strategy and some insights on the Indonesian startup landscape.
Tell us about yourself and how you came to join Convergence Ventures.
My background is actually in advertising, specializing in performance marketing. I worked at an agency, helping large multinationals create digital campaigns. And then I moved to a market-entry consulting firm where I helped foreign media and tech enablers penetrate the Indonesian market.
Seeing the rapid adoption of ecommerce in Indonesia, I was naturally interested in how these companies were being funded. I first heard about Convergence Ventures while doing research on the venture capital space. I sent cold LinkedIn messages to the team members to learn more. It was timely as they were coincidentally looking to hire someone with my skill set—proof that curiosity can lead you to opportunities.
What is your investment thesis at Convergence and which sectors are you closely looking at?
Convergence Ventures is an early-stage technology venture fund. We’re focused on the Indonesian market, but we also have portfolio startups outside of Indonesia.
We are sector-agnostic, but we tend to invest in models that have been proven in other markets and are targeting to disrupt the Indonesian market.
The company is structured to help early-stage founders with enough capital to get to series C and to provide assistance from the entire Convergence team post investment.
What does your post-investment strategy entail?
There are a few teams at our firm that focus on startup support. In addition to corporate development, we also have a recruitment team and a venture operations team.
The strategy is quite simple. We as VCs look for realized capital gains over the course of the lifetime of the fund. In order to make returns on our investments, the companies have to grow in valuation and then eventually have to exit. Our strategy is to help early-stage companies with key growth drivers that will help them grow into their own potential and help them secure further fundraising.
Under corporate development, we focus on four key areas: customer/client acquisition, strategic partnerships, government relations, and follow-on fundraising.
After investment, the team will typically discuss the business’ key drivers for growth based on their model and maturity. Then, we will start mapping out ways that we can help the company. Initially, we might first explore recruitment, licensing, and other fundamental needs that set the foundation for growth. We might also look at cross-portfolio value and insight exchange (how one portfolio company can help another).
Eventually, we will also facilitate senior-level introductions to relevant conglomerates in our network that may become powerful clients or partners.
When the founders are ready, we also like to play an active role in helping them navigate their fundraising efforts. We closely monitor venture transactions in the region and build relations with investors who may be interested in funding our portfolio in later stages.
The level of involvement varies from company to company, but we offer solutions that are always optional. We would never force a solution onto any of our portfolio.
What would you advise startups on navigating partnership opportunities?
I think the challenge here is definitely identifying and communicating the benefits of the partnership. Often times, when new partnerships are explored, one party has more leverage than the other, especially with startups. The real key to success is how you communicate that the partnership is a win-win for both parties.
Too many times, perfectly matched business partnerships fall apart because the parties don’t understand each other.
My advice is to not rush big partnership opportunities. The biggest wins are never the easiest to get, so put some time and energy into fully understanding what interests your partner and slowly build their trust.
Do you think the government is working toward opening up to foreign investors?
I think the government has clearly shown that foreign direct investment is a large priority. Minister Rudiantara has stated before that his ministry is shifting their role from a regulator/licensor to a facilitator and even an accelerator.
I’m not in the inner circle of regulators, but I feel that they are constantly trying to learn from other governments how best to regulate the digital ecosystem and the foreign investments into the sector. The US, Singapore, China, and Korea present good case studies for various types of regulations, however there is no one-size-fits-all framework.
Do you think Indonesian founders have a global mindset?
In Indonesia, you can definitely incubate a startup domestically. The market has generated companies valued at tens and hundreds of millions of dollars. We have several cases where the market produced unicorns as well.
In the last NextICorn Summit, Go-Jek’s Nadiem Makarim announced that he was going to look into other markets. Four months later, he was in Vietnam. He moved quickly, however according to him, there were several key criteria he had to consider before expanding regionally.
First, he had to be the number one player domestically in his sector. Second, his tech stack should be strong enough to operate in other markets. Lastly, he had enough funding to support the expansion.
Although this will vary from business to business, this mindset can be adopted by a lot of Indonesian startups. Grow big and solidify your position domestically, then using Indonesia as a home base, expand into the rest of Southeast Asia. I think it’s a valid approach, but not necessarily for everyone.