Indogen Capital CEO Chandra Firmanto explains why the VC is not looking to invest in current market leaders
Despite having only four startups under their belt — Ahlijasa, HijUp, InSight Medica, and AINO — Indogen Capital has quickly gained attention from Indonesian startup communities due to its all-star-lineup that includes five famous businessmen:
- Nararya Ciputra Sastrawinata
- Chandra Firmanto
- Teezar Firmansyah
- Hendry Willy
- Leontinus Alpha Edison
Nararya Ciputra Sastrawinata is a member of the Ciputra family, who runs one of the biggest property development companies in Indonesia. He has run the family’s project in China for several years, and has strong interest in tech investment.
Teezar Firmansyah has more than 13 years of experience in running private equity companies in the US, Singapore, and Indonesia. Hendry Willy is the founder of the gadget e-commerce platform TokoUSB.com.
Finally, Chandra Firmanto represents the serial entrepreneur of the group.
How did they come together?
As Firmanto describes in an interview over tea with e27, he had worked in Accenture after his graduation from the University of Southern California. He has also dabbled in his family’s businesses of multi-financing and the handling of distribution of Yamaha motorcycles and Dunlop tires.
He had also set up several joint ventures with the Ciputra family group — where he met Sastrawinata.
“Leontinus also happened to be my childhood best friend. We’ve been together since kindergarten; we hang out together, we play games together,” Firmanto explains.
Indogen Capital was founded with the idea that startup founders need more than just funding in order to develop their business.
“Founders also need good mentors. One of the reasons why Tokopedia was able to grow into what they are now, is because their early investors are great mentors,” says Firmanto.
A good mentor is able to help a startup save their time and avoid many unnecessary headaches. Firmanto gives the example of when their portfolio company, Ahlijasa, presented their plan for 2017.
“The plan was impressive except for one point: They wanted to set up a branch in Bandung, with the idea that Bandung has a great potential for laundry services. We agreed that the potential is great, but Ahlijasa’s [brand] is still not famous enough in Jakarta. Which means he still had a great untapped market in Jakarta, so why bother going to Bandung?” he elaborates.
“We want to shape the founders to reach their maximum potential. If this were competitive sports, we find the athletes, then we shape them into champions,” he concludes.
Indogen Capital considers itself as a sector-agnostic VC firm, and they invest between US$100,000 to US$500,000. The team targets companies working in industries that they feel “excited” about exploring.
Firmanto brings up the example of their investment into InSight Medica.
“They need us to help them with networking, in order to enter Indonesia. As you can see, they do not need us in terms of funding, as our share is only US$500,000. Meanwhile the company’s other investors are the owner of Paragon Sogo. With them, it is easy to find US$36 million. But what they want here is to find a trusted person … This is what we are tying to build in Indogen Capital,” he says.
The CEO is not able to disclose the amount of funding that that Indogen has in store; only the fact that they have gathered it through their network of family and friends.
Indogen is also considering extending its horizon and opening up its fundraising process — given that several parties have expressed interest in investing in the VC firm.
The firm also does not want to limit the amount of investment it plans for the year.
“We just want to invest as much as we [can],” Firmanto says.
“No matter how busy we are, we always try to read every startup pitch deck sent to us. Our motto is to never leave any stone unturned,” he adds.
Firmanto then explains that when a startup pitch gets rejected by investors, it is usually a matter of fit.
“For example, we planned to invest US$1 million [into a startup], but the startup was only asking for US$200,000. Certainly it isn’t the correct investment size,” Firmanto says.
So what exactly is Indogen is looking for?
Apart from working in a healthy and growing industry, the startup needs to have founders who are “tough as nails”.
“Good ideas meet bad founders, that is a sure way to fail. But great ideas meet great founders … they can always find a way to work,” Firmanto says.
“They have to be business-savvy, which means able to make tough business decisions. For example, firing your childhood friend if he does not perform,” he says.
Interestingly, they are not looking to invest in startups that are considered to be the current market leaders.
“The one thing that people often forget is that you’re not going to be a winner by selling the most; you become a winner by getting the largest mind share,” Firmanto begins.
“The simplest example would be Samsung versus Apple. Apple’s mind share is a winner over Samsung, even though Samsung sells more phones, as they cater to the lower-end segment. But who makes the most money? Apple, because they have the bigger mind share. People continue to buy their products even though the pricing is premium,” he explains.
As an example from Indogen’s portfolio, Firmanto points to HijUp. The company has a tendency to sell limited edition fashion products and Firmanto says these products continue to sell out.
“We are actually happier to see that, compared to seeing those who sell a lot but with non-existing profit for each item they sell,” he says.
“So we don’t just see who the current leader is, but we also need to be able to project the future,” he concludes.
Image Credit: Indogen Capital
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