News of the ‘collapse’ of Silicon Valley Bank (SVB) continues to loom over the global tech startup ecosystem – Indonesia is no exception. As of March 2023, the 16th largest bank in the United States was shut down due to the significant decrease in the values of its investments – among other reasons.
This incited worry amongst tech and startup players. However, we at East Ventures are firmly convinced that the situation will not affect our strong ecosystem.
“We have talked this through with our portfolio companies. We will continue to monitor the situation and be on the lookout for any progress about the case. We are ready to assist our stakeholders if there is any potential impact from the SVB case,” said Willson Cuaca, Co-Founder and Managing Partner at East Ventures.
The impact of SVB does not directly disrupt the Indonesian startup ecosystem. Yet, foreign investors are bound to be more careful in making investment decisions, especially in high-risk digital companies.
With this precedent, startup founders are expected to manage their finances more wisely and prudently.
“(Startups) must focus on their core capabilities and pay more attention to unit economics,” Willson added. He also said the era of aggressive expansion and new product testing should be put on hold. “Other than that, when it comes to concentration risks, do diversification in banking.”
2023 might seem like a shaky year, but we at East Ventures continue to be optimistic about our investments. Resonating our long-standing investment philosophy, we will focus on the ‘People’ and ‘Potential Market’ for seed-stage firms.
Meanwhile, traction proves to be the most pivotal factor in growth-stage investments, which covers: proven business models and products/services, strong growth trajectory and inflection point in customers, as well as regional leader/sector champion with robust entry barriers.
This year too, we are paying close attention to the healthcare sector – as we collaborated with the Indonesian Ministry of Health to launch our pilot white paper, “Genomics: Leapfrogging into the Indonesian healthcare future.” Additionally, the firm is also partnering with Temasek Foundation in holding Indonesia’s largest climate innovations tech platform, the Climate Impact Innovations Challenge 2023, in search of quality sustainability-tech startups in Southeast Asia.
“At East Ventures, we have always believed that great founders can capitalize on situations well and carry us through difficult times,” concluded Willson.
Original article on Kompas.com, 17 March 2023.