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Mandiri’s capital venture eyeing startups

By Grace Amianti for The Jakarta Post,

New venture capital firm PT Mandiri Capital Indonesia (MCI), owned by state-run Bank Mandiri, has been launched to provide alternative financing for the country’s potential start-up businesses.
For the first phase, Bank Mandiri has injected fresh capital worth Rp 350 billion (US$25.2 million) into MCI and controls 99 percent of the company’s equity, while the remaining 1 percent is held by its securities subsidiary Mandiri Sekuritas.

Bank Mandiri is committed to increasing the company’s total capital to Rp 500 billion, according to MCI president director Eddi Danusaputro. The company, which was inaugurated on Wednesday, will provide financing through private placements in prospective startup companies, especially “financial technology” (fintech) firms that have recently become popular.

“At least 80 percent of the startups that we seek will be fintech companies. We have no problem with asset size of the startups as long as they have potential and good business models,” Eddi said in a press conference at the launch on Wednesday.

He said MCI was currently conducting due diligence for prospective startups, also called “investees”, some of which had already showed their readiness to start partnering with the company.

MCI also regards Mandiri Young Entrepreneur and Mandiri Young Technopreneur, which are competitive corporate social responsibility programs of its parent company and which seek out new entrepreneurs, as “talent pools” to help search for potential startups.

“We also plan to build partnerships with local and global universities, business incubators and technology companies in order to screen potential startups and investors,” Eddi said.

Eddi said MCI was ready to be a “business incubator” for thriving startups, which often face difficulties in seeking traditional financing from banks and other financial companies as a result of tight regulation.

He said MCI would open access to Mandiri Group’s networks and customers and help widen market access for startup entrepreneurs who had already obtained capital.

Eddi added that the company would be open to partnership with other venture capitalists through co-partnering schemes and clear “exit strategies”, or mechanisms for when they wanted to divest their stakes in the startups.

MCI was also prepared by its parent company to build a joint-venture firm with BC Card, a South Korean payment system company, to enhance Mandiri’s electronic data capture (EDC) system.

Eddi said MCI would work together with Digital Artha Mandiri, an IT company owned by Mandiri Manajemen Investasi, a Mandiri second-tier asset management firm, in order to enhance Mandiri’s e-cash and cardless electronic money (e-money) products.

Bank Mandiri finance and strategy director Kartika “Tiko” Wirjoatmodjo said the lender and BC Card were currently in the process of establishing the joint-venture company, which is expected to start operating next month.

Tiko said previously that the joint-venture would help Mandiri to outsource its EDC system, allowing an open EDC platform for other banks wishing to utilize its payment and settlement services.

“As Mandiri’s new subsidiary, the performance of MCI will be seen through the increase of its valuation, rather than dividends. I have yet to set a target for MCI, but usually valuations of fintechs double or triple in five years if they are successful, so we want to see the potential first,” he said. – See more at: http://www.thejakartapost.com/news/2016/01/28/mandiri-s-capital-venture-eyeing-startups.html#sthash.k9jZkVNh.dpuf

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