SOEs Are Encouraged To Increase Local Startups Through The Red And White Fund

Local Startups (Photo: ANTARA)

JAKARTA - BUMN observer from the Management Institute of the Faculty of Economics and Business, University of Indonesia Toto Pranoto assesses BUMN companies as state-owned companies must take a role in raising local start-ups or startups.

According to Toto, SOEs should not be less agile than foreign investors in investing in local startups.

"If state-owned companies do not want to take this role, the new unicorns that will appear in Indonesia will be backed up by foreign venture capitalists because there is no local venture capital to support them," said Toto as quoted by ANTARA, Saturday, June 18.

According to Toto, SOE investment in local startups is a form of partisanship with the state through the Ministry of BUMN and BUMN companies to raise local startups. State-owned companies have an interest in the process of fostering local startups.

As a country with a large population, Indonesia has a huge market potential. This is what actually encourages many foreign startups to expand their business to Indonesia.

"Don't let the Indonesian market be dominated by foreign startups. On the other hand, our unicorn must be supported so that it can expand abroad. So that Indonesia is not just a market," said Toto.

According to Toto, the government is already aware of this. That's why, some time ago, the Government through the Ministry of SOEs formed a consortium of Red and White Funds involving four state-owned companies, namely Bank Mandiri, Bank BRI, Telkom, and Bank BRI.

Through the Merah Putih Fund, state-owned companies are expected to be able to use part of the allocation of funds in their venture capital companies to finance local startups.

"The interest is, of course, as a country with a large population, don't let Indonesia only become a consumer country," said Toto.

According to Toto, most of the investors behind local startups with large valuations or unicorn status are foreign giant companies.

For example, Softbank is the most diligent in disbursing large amounts of investment. In addition, Alibaba, Temasek, and large US corporations such as Google and Facebook are also included in startup companies in Indonesia.

"The market is here, but unfortunately the investors are from outside," said Toto.