The alleged corruption case involving startup investment management at agritech company TaniHub Group has triggered calls for clearer regulations in Indonesia’s venture capital industry (28/5). The case is related to investments made by BRI Ventures and MDI Ventures between 2019 and 2023.

The case, currently being heard at the Central Jakarta Corruption Court, involves former BRI Ventures President Director Nicko Widjaja. Prosecutors demanded an 11-year prison sentence and a Rp1 billion fine against him.

Prosecutors also charged PT Metra Digital Investama (MDI Ventures) President Director Donald Surjana Wihardja, MDI Ventures Vice President of Investment Aldi Adrian Hartanto, and former BRI Ventures Vice President of Investment William Gozali.

The allegations involve corruption and money laundering related to investment management activities conducted by BRI Ventures and MDI Ventures in TaniHub Group. Alleged state losses reached around US$5 million or approximately Rp73.3 billion from BRI Ventures’ investment and Rp290.92 billion from MDI Ventures’ investment.

The total alleged state losses in the case reached around Rp364.22 billion.

Venture Capital Industry Calls for Regulatory Clarity

Indonesian Venture Capital Association (Amvesindo) Chairman Eddi Danusaputro said the association respects the ongoing legal process.

“And it is not appropriate to assess a verdict that has not yet been handed down,” Eddi said on Wednesday (27/5/2026).

However, he said the case has sparked important discussions among venture capital industry players, especially firms operating under state-owned enterprises.

According to Eddi, the agritech sector requires special attention because Indonesia is one of the world’s largest agricultural countries. He said agricultural digitalization is a strategic long-term necessity rather than merely an investment trend.

He explained that agritech businesses carry different risk profiles compared to other technology sectors because they have longer business cycles, depend heavily on external factors such as weather and supply chains, and face monetization challenges that may only become visible after several years.

Amvesindo is encouraging constructive dialogue between venture capital players, the Attorney General’s Office, the Financial Services Authority (OJK), and related ministries to formulate clearer governance standards for corporate venture capital investments, particularly those involving state assets.

“Regulatory clarity is a prerequisite for the courage to take responsible risks,” Eddi said.

He warned that without adequate legal certainty, Indonesia risks losing top talent in national venture fund management, creating broader ecosystem losses beyond a single failed investment.

Eddi said the industry should prioritize four areas, including auditable investment decision documentation, deeper qualitative due diligence, active portfolio monitoring, and shared industry guidelines.

“Every stage of investment needs to leave a trail of decisions that can be objectively explained to any external party,” he said.

He added that startup failures often stem from data integrity problems and management weaknesses that are not detected early, rather than poor business models alone.

According to him, investor involvement should continue after term sheet signing through periodic monitoring and early escalation mechanisms for signs of financial pressure.

Experts Highlight Risks in Startup Investments

Indonesian Digital Empowering Community (Idiec) Chairman Tesar Sandikapura said every investment carries risks and no investment can guarantee profits.

However, he said some investments are conducted without sufficient caution in assessing risk factors.

“In my opinion, state-owned enterprises should carefully measure these risk limits. Which ones are acceptable and which ones have high potential to harm the state,” Tesar said.

He stated that these boundaries should be discussed jointly with the Attorney General’s Office and the Corruption Eradication Commission (KPK) to prevent similar cases from recurring.

“That could instead make investors reluctant to invest in Indonesia,” he said.

Tesar emphasized that due diligence is a critical stage in determining which companies deserve investment and which are considered high risk.

According to him, if calculations are conducted properly and without manipulative intent, potential losses should already be predictable from the beginning.

He also proposed involving independent external auditors or law enforcement officials to ensure due diligence processes remain aligned with applicable frameworks.

Tesar predicted that corporate venture capital firms would become more selective and cautious when distributing funding to startups following the TaniHub case.

Venture Capital Firms Expected to Tighten Investment Selection

DailySocial.id Founder and CEO Rama Mamuaya explained that venture capital firms manage funds collected from institutional investors such as pension funds, foundations, and wealthy families to invest in startups through share ownership instead of loans.

According to Rama, the main difference between venture capital firms and banks lies in their risk mechanisms. Banks provide loans that must be repaid with interest regardless of business conditions, while venture capital firms become shareholders and share investment risks.

“If startups grow and become more valuable, VC shares also increase in value. If startups suffer losses or collapse, those shares lose value. The risk is shared,” Rama said on Wednesday (27/5/2026).

He explained that venture capital firms usually seek investment exits within seven to 10 years through IPOs, acquisitions, or share sales to other investors.

Rama stressed that the venture capital business model operates based on portfolios rather than single projects. Some startups may fail, others may survive without generating significant returns, and only a few may deliver exceptional gains.

“And from the last group, usually only 1–2 startups provide extraordinary returns of 50x to 100x that cover all losses from other startups,” he said.

Director of Digital Economy at the Center of Economic and Law Studies (Celios) Nailul Huda said startup investment generally progresses through several stages, starting from pre-seed and bootstrap phases to seed funding and later series rounds.

According to Huda, information at the early startup stage is usually very limited, making business sustainability difficult to predict because projections are often based on ideal assumptions.

“Causing state losses in this business context must be proven whether there were personal benefits from the startup losses themselves,” Huda said.

He predicted that venture capital firms will become increasingly selective in the future, not only because of legal concerns but also because of changing startup business models.

“Besides that, VC will also play a bigger role in startup decision-making after providing funding. They will not only stay passive but also participate in managerial processes,” he said.

PHOTO: TANIHUB/BINISIA

This article was created with AI assistance.

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