Merah Putih Fund

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A state-backed venture capital initiative focused on accelerating late-stage Indonesian startups (soonicorns) towards unicorn status through targeted funding and ecosystem support.
What are the main aims and objectives?

The Merah Putih Fund (MPF) aims to help Indonesia nurture a new crop of domestic technology unicorns by supporting late-stage startups led by Indonesian citizens and with substantial operations in the country. The fund focuses specifically on startups approaching unicorn status—often referred to as "soonicorns"—to reduce dependence on foreign investment and to encourage successful local exits such as IPOs on the Indonesia Stock Exchange. MPF seeks to strengthen economic sovereignty, deepen the domestic innovation ecosystem, and enable the growth of scalable, competitive technology companies with strong Indonesian identity and ownership. The initiative was developed in recognition of the barriers faced by local entrepreneurs in securing large-scale late-stage funding, with a goal to ensure that the successes of Indonesia’s digital economy also deliver national benefits and ownership.

How does the program work?

The Merah Putih Fund operates as a government-led venture capital fund targeting late-stage startups seeking Series C and D investments. It is managed collectively by five state-owned enterprise (SOE) venture capital arms: Mandiri Capital Indonesia, MDI Ventures (Telkom Group), BRI Ventures, Telkomsel Mitra Inovasi, and BNI Ventures. Companies eligible to apply must be founded by Indonesian citizens, have significant operations in Indonesia, and present a credible path towards exiting through an IPO on Indonesia's domestic exchange or via acquisition by an Indonesian entity.

The programme responds to the challenge that promising Indonesian startups often experience in attracting sizeable late-stage investments without diluting local ownership or shifting operational control abroad. By pooling capital from SOEs, MPF injects resources into these companies while aligning with national interests.

The fund’s structure is collaborative, with investment decisions made jointly by representatives from each participating SOE. MPF performs rigorous due diligence and expects a return of 14–15% per startup invested in. In addition to financial support, MPF opens access to the wider SOE ecosystem, providing opportunities for startups to form strategic partnerships, gain customers, and leverage state-owned platforms or infrastructure for scaling. Companies are also supported with business development, regulatory compliance guidance, and financial management advice.

MPF’s capital is earmarked only for late-stage companies (typically Series C and D), meaning that it does not invest in riskier early-stage ventures. Investments are expected to range from $5–40 million per company, but amounts can vary depending on each company’s needs and potential. The operational model emphasises local value retention, strict governance, and transparency, with regulatory oversight by Indonesia’s financial regulator (OJK). New capital from additional SOEs and private actors may be added in future fundraising rounds. The fund’s goal is both to create “national champion” tech firms and to demonstrate that late-stage Indonesian startups can scale successfully and exit through local markets, reinforcing Indonesia’s innovation sovereignty.

What is the overall cost?

The Merah Putih Fund launched with an initial capital pool of $300million (approximately Rp4.3trillion), funded by the five participating SOE venture capital arms. The contributions included $100 million each from MDI Ventures (Telkom Group) and Telkomsel Mitra Inovasi, $82.5 million each from Mandiri Capital Indonesia and BRI Ventures, and $35 million from BNI Ventures. The programme is state funded and does not require startups to pay fees to participate or benefit from its investments. Future rounds may draw additional investment from other SOEs and Indonesia’s sovereign wealth fund.

How was it implemented?

The Merah Putih Fund was formally announced in December 2021 by President Joko Widodo, as part of Indonesia’s broader digital transformation agenda. Its formation followed high-level collaboration between the Ministry of State-Owned Enterprises and the five leading SOE venture capital entities. Key government officials led the design and negotiation processes, notably Erick Thohir (Minister of State-Owned Enterprises), and the chief executives of the respective SOE VC arms.

In the initial phase, stakeholders defined the fund’s mandate, eligibility criteria, and legal framework. The fund was registered and vetted by the Indonesian Financial Services Authority (OJK) to ensure compliance with financial regulations and governance standards. An investment committee, composed of representatives from each SOE partner, was established to oversee fund operations, deal sourcing, selection, and portfolio monitoring.

The phased implementation process included:

  • December 2021: Official launch announcement and mandate set.
  • Early 2022: Regulatory groundwork, legal documentation, and committee setup.
  • September 2023: Completion of initial capital pooling and operational launch, with investment processes initiated shortly thereafter.
  • 2024–2025: Active pipeline development, additional SOEs invited to participate, and first set of investments executed.
What impact has been measured?

There is currently no information available on the impact of the program. 

What lessons can be learned?
  • The fund is currently restricted to late-stage startups, which means early-stage innovative businesses may still struggle to find critical funding in Indonesia.
  • Operational complexities arose from inter-agency coordination, with multiple SOE partners requiring consensus on deals, sometimes slowing deployment.
  • The initial capital pool, while significant in the national context, is modest compared to leading global venture capital funds, potentially limiting the pace of unicorn creation.
  • Future success will depend on the fund’s ability to demonstrate profitable exits and attract further private and international investment.
  • Some startups have cited the eligibility requirements (such as full Indonesian ownership and mandatory IPO planning) as rigid, possibly reducing the number of eligible high-growth companies.
  • Policymakers have noted the importance of regular impact evaluations and stakeholder feedback to adapt the fund’s strategy in a rapidly changing digital ecosystem.

CURATED BY

Tom Hancock

Research Associate
Global Entrepreneurship Network
United Kingdom