Finch Capital and MDI Ventures’ joint venture Arise has announced the first closure of its US$40 million launch fund.
The fund was backed by a number of third-party corporate investors, family offices, and high-net-worth individuals. Metrodata Electronics, an Indonesian publicly listed ICT company, is one of the most notable of these.
The Indonesia-based fund aims to invest in 25 tech firms in Southeast Asia in the post-seed to pre-Series A stages for the next three years, with ticket sizes ranging from US$250,000 to US$3 million.
Arise startups are provided a road to acquire funding at various phases of their growth, all the way up to exit (IPO or M&A).
Arise is actively working on additional investment opportunities. By the end of 2021, the fund hopes to have concluded at least five deals.
Arise, which was founded in late 2020, goes beyond writing checks to invest in businesses early on, even before the founders have completely formed their concepts and teams.
Additionally, through its corporate LP network, it gives access to important go-to-market partners. Through its linked sister funds, such as MDI Ventures and Centauri Fund, it also empowers long-term financing.
Startups will have the opportunity to attend Telkom’s Indigo Nation incubator before getting funding from Arise. They may also tap into Arise’s extensive network of corporate LPs and tech communities throughout Europe, Asia, and Silicon Valley.
Despite the substantial influx of high-quality founders over the previous decade, according to Arise Partner Aldi Adrian Hartanto, a lopsided capital allocation makes it more difficult for potential entrepreneurs to get financing during the region’s economic slump.
“Many of these ‘next generation’ founders, who often come with experience from established local tech ‘unicorns’ and ‘centaurs,’ already know how to grow and scale tech ventures in the local market. But they have yet to really get their names out there and still require further support in accelerating product-market fit, validating ideas, and raising proper series A rounds after that,” he said.
“Startups backed by Arise should ideally go on to receive investment from Centauri at the series A stage, MDI Ventures at series B, and later stages. Finally, in some cases, they should see a meaningful exit via acquisition with Telkom Group as one of the potential buyers or IPO,” added Hartanto.
“We’ve seen many seed-stage companies struggling to access the right markets, which is reflected by a lack of traction,” says Hans De Back, Managing Partner at Finch Capital. “Our role is to solve this problem with immediate go-to-market avenues by collaborating with our network of enterprise partners such as Metrodata and portfolio companies. In this way, we can enable companies to grow much faster and set them up stronger for series A.”
Finch Capital, a European and ASEAN-focused firm, announced the first closure of its third European Fund (EUR150 million) in high-growth fintech and AI businesses earlier this year.
Meanwhile, MDI Ventures, which manages US$830 million in assets, offers entrepreneurs a variety of ways to connect with Indonesia’s Telkom Group, which includes firms in telecommunications, multimedia, real estate, financial services, and a network of other state-owned industries.
Indonesia has been the most notable startup center in Southeast Asia in recent years, thanks to the meteoric development of tech-based unicorns such as Gojek, Traveloka, and, most recently, Blibli. Bukalapak, the country’s e-commerce platform, debuted on the Indonesia stock exchange today, making it the first unicorn in Southeast Asia to go public.
