MDI Ventures, the venture capital arm of Telkom Indonesia, is navigating a cautious investment strategy in 2024, particularly due to global economic uncertainties. Despite these challenges, the company remains optimistic about the growth potential of certain sectors in the startup industry, especially those at the growth stage.

According to Dhendy Hamdani, Vice President of Corporate Office at MDI Ventures, the resilience of Indonesia’s tech startup sector remains strong, particularly in sectors like fintech, artificial intelligence (AI), cybersecurity, and climate sustainability. These emerging sectors continue to show significant promise as they address increasing demand for financial access, data-driven solutions, cybersecurity, and awareness of climate change and environmental issues.

Fintech, AI, and sustainability are seen as the key drivers for growth in Indonesia's startup landscape. With fintech addressing growing needs for financial inclusion, AI and automation revolutionizing industries, and the rise of climate-conscious businesses, these sectors align with the market’s evolving demands. Investors are particularly drawn to companies with sustainable business models that prioritize both long-term profitability and responsible financial management.

However, Dhendy also pointed out that MDI Ventures is wary of startups that lack sustainability in their business strategies. Companies that neglect key elements such as financial stability, growth potential, and long-term sustainability are seen as higher risk in the current market environment. "Startups that don't take sustainability and sound financial management seriously face significant challenges in maintaining a stable business model amid market changes," Dhendy noted.

In response to current market conditions, MDI Ventures is adjusting its approach to investments. The company will continue funding startups, but with a heightened focus on due diligence and a cautious assessment of the current global economic landscape. The venture capital firm is looking to invest in sectors that are not only promising but also strategically aligned with the company's long-term objectives.

The venture capital sector, however, is experiencing a slowdown in funding. Dhendy explained that global market instability and the depreciation of the rupiah have made international investors more risk-averse. As a result, many investors are holding back funds, waiting for a more favorable economic climate before committing to more aggressive investments. According to data from Indonesia’s Financial Services Authority (OJK), venture capital financing has seen a noticeable decline, with a YoY decrease of 8.1% in September 2024, continuing the downward trend that began earlier in the year.

Despite the overall slowdown in venture capital funding, there are signs of recovery. In August 2024, funding figures showed an improvement, with a smaller contraction of 9.03% compared to the previous months. This slight recovery suggests that while the venture capital market remains cautious, there are still opportunities for high-potential startups, especially in the sectors MDI Ventures is focusing on.

Looking ahead, MDI Ventures remains committed to strengthening its collaborations with strategic partners, including Telkom, other state-owned enterprises (BUMN), and private companies. By focusing not only on technology innovation but also on building sustainable business synergies, MDI Ventures aims to foster long-term growth for startups in Indonesia's dynamic tech ecosystem.

KONTAN.CO.ID