Intudo Ventures Closes $115M Third Fund for Indonesia

Intudo Ventures Closes $115 Million Third Fund

Intudo Ventures, an investment firm concentrating exclusively on Indonesia, has announced the successful closing of its third fund, amassing a total of $115 million. Known as Intudo Ventures Fund III, the fund was secured in under three months and exceeded its initial target.

Fund III Limited Partners

The limited partners contributing to Fund III include Black Kite Capital, the family office associated with Singaporean business leader Koh Boon Hwee. Wasson Enterprises, the family office of former Walgreens Boots Alliance CEO Greg Wasson, and PIDC, the investment division of Taiwan’s Uni-President Enterprises Corp, are also key investors.

Furthermore, the fund benefits from the participation of over 30 Indonesian families and their associated conglomerates. More than 20 prominent global funds and managing partners, alongside over 10 founders of technology unicorns, also contribute to the fund.

The Firm’s Origins and Growth

In June 2017, Intudo’s founding partners, Patrick Yip and Eddy Chan, established the firm as the first venture capital entity solely focused on Indonesia, initiating with a debut fund of $10 million.

Initially, skepticism surrounded the viability of a country-specific fund concentrating on early-stage Indonesian businesses, particularly given Yip and Chan’s intention to cultivate a focused portfolio and maintain close collaboration with startups.

Validation and Portfolio Expansion

By 2019, Intudo successfully closed its $50 million second fund, with Founders Fund among its limited partners. Chan stated this participation served to validate the firm’s core mission.

Companies currently within Intudo’s portfolio from its initial two funds include Pintu, TaniHub Group, and Gredu.

Hyperlocal Investment Strategy

“When we initially sought $10 million, numerous managers expressed doubt,” Chan recounted to TechCrunch. “However, four years later, we are managing approximately $200 million.” This demonstrates the effectiveness of a hyperlocal approach for the appropriate markets.

Investment Focus for Fund III

Intudo plans to allocate its third fund to approximately 12 to 14 startups. These investments will target sectors such as agriculture, B2B and enterprise solutions, education, financial services and insurance, healthcare, and logistics.

Initial investment amounts will vary from $1 million to $10 million. The firm will continue to prioritize leading early-stage and Series A funding rounds, while also considering Series B and C investments in companies from its earlier funds.

Maintaining Investment Independence

Unlike many funds reliant on a few major investors, Intudo has capped each limited partner’s investment at 10% of the total fund size. This strategy ensures the firm’s independent investment approach and equitable treatment of all LPs.

“A 10% limit signals to founders that we prioritize their company’s best interests, rather than catering to any single special interest group,” Chan explained.

Seeking Companies with Sustainable Advantages

The firm will prioritize companies possessing strong competitive advantages, such as robust intellectual property or advanced technology. It will also focus on businesses operating within heavily-regulated industries, creating barriers to entry for competitors.

Pintu as a Case Study

Chan highlighted crypto-exchange Pintu as an example of Intudo’s investment strategy.

“Initial reactions focused on the trendiness of the investment, but it’s crucial to understand we first met the founder when Bitcoin’s value had fallen to $6,000,” he clarified. “We extended the term sheet, and six months later, in March 2019, Bitcoin was trading at $3,000.” The key takeaway is recognizing the founder’s potential and attracting top talent during a market downturn.

The “Pulkam” Network

A significant portion of Intudo’s portfolio founders are “pulkam kampung” – Indonesians who pursued education and careers abroad before returning to establish companies in their home country. The firm supports these founders through its Pulkam S.E.A. Turtle Fellowship mentorship program.

Approximately one-third of deals from Intudo’s first two funds originated from universities and the tech community within the United States.

Close Collaboration with Portfolio Companies

Intudo maintains a close working relationship with its portfolio companies following investment. Notably, all companies have secured a commercial deal through the firm’s network prior to receiving funding.

The firm’s country-specific focus proved advantageous during the pandemic, enabling continued in-person meetings with founders on a near-weekly basis.

The Importance of In-Market Support

“The founder community faced significant challenges this past year and last due to COVID-19,” Yip stated. “Many founders needed to adjust their business plans. Our role as an in-market, actively involved investor became even more critical. Companies lacking an in-country partner were particularly vulnerable.”

He concluded, “Our hands-on approach and concentrated portfolio are highly valued by the founder community, and we intend to continue this strategy with Fund III.”