Willson Cuaca: “A tech winter? Not in tropical Indonesia”

Around 3,000 startups knock on the doors of East Ventures every year, hoping to join the ranks of unicorns like Tokopedia, Traveloka, and Carro, which have all been backed by the prominent VC firm.

But if you think that presenting with a pitch deck would fly – think again.

“Most founders who pitch to me, I don’t allow them to open their laptops,” Willson Cuaca, Co-founder and Founding Partner, tells MONIIFY.

“You have to know everything in your head. If you’re good at cooking, you don’t need to peek at the recipe, right? Just cook it on the spot.”

Since Cuaca founded East Ventures in 2009, the firm has backed more than 300 tech companies in Southeast Asia and become the most active VC firm in Indonesia.

In an interview, Cuaca explains why he’s confident about the investment outlook for Indonesia in 2025, even as the tech winter continues to have a chilling effect elsewhere. “There’s no winter in Indonesia,” he says in jest. “We’re a tropical country.”

No more ‘spray and pray’

East Ventures has been known for its “spray and pray” strategy – investing small amounts in a large number of startups, and hoping that some succeed.

Its decisiveness also sets it apart from other VCs. Big investment decisions could be made in less than two days, as was the case with Tokopedia. In that case, it was a winning bet, following Tokopedia’s merger with ride-hailing and delivery giant Gojek in 2021, and an acquisition by Bytedance earlier this year, solidifying its position as a key player in Southeast Asia’s tech ecosystem.

Recently, though, East Ventures has become a lot more judicious about where it “sprays” – looking specifically for founders on a clear mission to add value to Indonesia.

“We ask: Does the company solve a real problem? Is it making things more efficient, easier, and cheaper?” says Cuaca.

Things are on the up

The shift to a more cautious approach is a reaction to the changed landscape around VC in Indonesia, says Cuaca. From 2009 to 2021 were the years of low interest and high liquidity. But the current, high interest era demands a more judicious approach.

“We remain cautiously optimistic,” says Cuaca. “During this period, we focus on helping our portfolios strengthen their fundamentals.”

Opinions are divided on the outlook for Southeast Asia’s digital economy. Lightspeed, a global VC firm, notes that while $72 billion went into Southeast Asia’s startups over the last five years, the region’s returns lag behind China and India. It found that funding invested in Chinese and Indian startups generated more value – 2.4x and 1.6x, respectively – compared to just 1.3x in Southeast Asia.

But Cuaca is more bullish, pointing out that East Ventures’ growth-stage portfolio has seen a 40% year-on-year revenue increase. This outpaced the 14% revenue growth recorded by Southeast Asian digital economies in 2024, according to a report by Google, Temasek, and Bain.

On top of this, recent global events like falling interest rates and a rebound in capital markets after Trump’s re-election signal that economic fundamentals are improving, he says.

“I’m confident Indonesia will continue to be one of the largest economies, driven by its young demographic, strong consumption, and digital-savvy population,” said Cuaca.

The startup secret sauce? 

Indonesia continues to position itself as a major consumer market, offering numerous opportunities for entrepreneurs to develop innovative and valuable products, according to Cuaca. 

But there’s a need to deepen digitalization in more sectors, including manufacturing, to inspire entrepreneurs to create more valuable products and drive economic growth.

This can trigger a multiplier effect across industries, generating jobs and revitalizing economic activity.

“The manufacturing sector needs a bigger push so we can develop new local brands. Why is this crucial? Because we already have strong e-commerce as a distribution channel and robust funding provider, making it easier for young entrepreneurs to succeed,” Cuaca says.

Less sugar, please

With so many founders coming to the firm every year, Cuaca and his team prioritize founders recommended by trusted referrals who can vouch for founders’ potential and capabilities.

Whether it’s fellow founders or key investors, word of mouth is the most powerful marketing tool. Build a solid reputation, go to networking events, get noticed in the right circles, and you’ll unlock the doors to top VCs.

But don’t sugarcoat things too much, he says. Keep it real!

If you’ve got challenges, own up to them. Investors aren’t fans of empty promises – they’ve met thousands of founders with perfect pitches. So be yourself.

“If I meet a founder who says everything’s great – the team, the product, everything’s perfect – the more worried I get,” Cuaca said. “No business starts out all good.”

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The original article was published on Moniify, 17 December 2024.