The low number of local startups in Indonesia that managed to secure Series B funding rounds and beyond has encouraged East Ventures, SMDV, and Yahoo! Japan Capital to launch new venture capital firm EV Growth.
East Ventures Managing Partner and Founder Willson Cuaca told the press on Thursday that with the presence of EV Growth, it is expected that there will be no need for local startups to look abroad to raise their Series B funding round.
“I noticed that there is still a gap for local startups who want to get into Series B funding round and beyond. Though EV Growth is open for the Southeast Asian market, our focus still lies in Indonesia.”
Prior to the launch of EV Growth, representatives of East Ventures, SMDV, and Yahoo! Japan Capital have met since last September. Due to the shared vision and mission, the parties then decided to build EV Growth.
“Yahoo! Japan Capital has been struggling to find the right startup to invest in. In line with our intention to partner with a local player, we decided to collaborate with East Ventures and SMDV with their excellent track record,” said Yahoo! Japan Capital CEO Shinichiro Hori.
EV Growth will focus on startups that have reached growth and post-revenue stage, tapping on the funding, networking, and experiences that the three VC firms have.
“Yahoo! Japan has experiences in internet services, C2C marketplace, online banking, credit card services, and even mobile payment services. In addition to funding, we hope that startups will be able to take these to their advantage,” Hori said.
Funding implementation for startups
EV Growth will start operating in the second quarter of 2018 and is aiming to raise US$150 million. The firm said that it already managed to secure US$100 million from the three venture capital firms.
“We will use a different approach from East Ventures in determining the startups and how much we invest in them. It opens its door for all startups in Indonesia, not only to East Ventures portfolio companies,” Cuaca said.
From the first stage of its funding round, EV Growth expects to invest at least US$5 million in each startup. The firm aims to invest in 20-30 startups.
“The agreement with the startup founders will be for 10 years; the first five years will focus on investment while the remaining five years will focus on return, with adjustment to market condition,” Hori said.
EV Growth is currently focussing on searching for startups that fit its criteria. When asked to name the startups it is investing in, SMDV Managing Partner Roderick Purwana said that there are already “several” in execution stage, but he declined to name them.
“Both East Ventures, SMDV, and Yahoo! Japan Capital have the experience and resource to support Indonesian startups in growing their business, in line with EV Growth’s goal,” said SMDV Senior Advisor Franky O. Widjaja.