"My work philosophy is about having a pure partnership where we have a common goal and we help each other reach it. If we have different goals, it might not be right for us to continue working together." -Aldi Adrian Hartanto
Aldi is the Partner at Arise, an early stage fund initiative by MDI Ventures and Finch Capital with a mission to empower the 3rd Generation of Entrepreneurs in the post-pandemic era who's building a R.A.B.B.I.T. (Real Actual Business Building Interesting Tech) through his Backward Investment Thesis which is powered by multi corporations and venture funds backers.
He is also the VP of Investments at MDI Ventures, an $830 Million AUM Global Multi-Fund VC Firm investing in local founders, mainly backed by Telkom Indonesia. Aldi is leading the overall global investment activities with focus on seed-to-growth equity stage startups across 5 Funds and 3 Offices (ID, SG, USA) with portfolios that represent 12+ Countries including PayFazz, Waresix, Kredivo, MPL, aCommerce, SiCepat, ObserveIT (Exited to Proofpoint), Wavecell (Exited to 8x8), Red Dot Payment (Exited to PayU Naspers), Whispir (IPO at ASX), and Geniee (IPO at TSE).
Prior to MDI Ventures, he was in charge of setting up, leading, executing, and managing investments of a Silicon Valley based Venture Capital firm in the SEA region and #1 Fintech focused VC arm of Indonesia largest Corporate Lender with top SEA portfolio which includes Alodokter, Investree, Koinworks, Amartha, Bridestory (Exited to Tokopedia), Moka (Exited to Gojek), Urbanindo (Exited to 99.co) Jurnal (Exited to Mekari), Talenta (Exited to Mekari), and Cashlez (IPO at IDX).
Recently, Aldi was awarded as the only GCV Powerlist Top 100 from SEA region among other top global CVCs such as Softbank, Intel Capital, GV, M12, Naspers, Tencent Investment, and Alibaba Innovation Ventures.
If you are an aspiring 3rd Generation of founders who is interested to build R.A.B.B.I.T and looking for a highly strategic and agile partner in Indonesia to crack its US$ multi-billions Digital Market opportunities, don't hesitate to reach him out - aldi.hartanto@mdi.vc
This episode was produced by Kyle Ong.
Jeremy Au (00:29):
Hey, Aldi. Good to have you on the show.
Aldi Adrian Hartanto (00:32):
It will be always be a pleasure, man. Thanks for having me.
Jeremy Au (00:34):
Yeah. I'm excited, Dharmadi from Alpha GWC connected us, and I'm excited to share a little bit more about your story.
Aldi Adrian Hartanto (00:42):
Looking forward to that, man.
Jeremy Au (00:44):
Aldi, for those who don't know you yet, obviously they look at you and say, "Wow, MDI Ventures, VC, Accelerators, all these things." But how do you tell your story?
Aldi Adrian Hartanto (00:56):
I always say that I was remarkably unremarkable though in terms of my background. I was coming from... And it's very much about serendipity. I didn't expect that I would get today. I was coming from a very modest background. Technically, my life started in South Korea when I was 18. My dad passed away at that time, and I didn't accepted in any schools. Even very much mediocre one didn't accept it, and I didn't have any money, because my dad passed away and he didn't left much things for me. So I didn't have much options, and only get one. For scholarships, somehow, I don't know how, but I think they kind of slipped, the registration, somehow I get it, so I just go. It was from some new school of business, a business school by one of the richest man in Indonesia called Sampoerna, the billionaire. And I took the school, and back at that time, because I realized that I'm not that smart, I'm not coming from very well established background, and I'm not have that much network as well, so I think that I need to do something further. So I started working since I was in my first year. Take some multiple jobs to feed my family as well.
Somehow, all of this experience with me today, the real things of connecting the dots. For example, when I got into the VC, it's actually when I was in my second year. It was 2012. My first mentor was in department of equity. So he was fighting off the investment firm called a big advisory. So I'm doing a part-time as analyst there, helping them with multiple portfolio management, giving them some insight on the market, and then one day, he asked me, "Hey, what do you want to do after you graduate?" Oh, that's actually a good question. I didn't know.
And then I leave for the day, I sleep on it, and then I come back to him like, "Hey, I want to be like you. I want to be in private equity." And he said, "Oh, it's actually the wrong answer." Which I was like, "Why? It's a very good industry, right?" Yes, it was good, but five years ago, you should looking for what actually happen next 10 years. You are investors. Good investment people. So you need to look much forward. So you should look for, as we know from standpoint for example, venture investment never coming from big companies or big industry. You should be going for the next wave.
So he said to me, "You should look at the venture capital industry." But that was 2012. So it's not even industry or things that people look. So I started off to really understand that. He hooked me up with one of the guys, which one of it was venture management capital at that time, which Fenox was a VC based in the Valley. They just started out a firm, an investment in Indonesia, and I was being connected to them through my mentor, which formerly asked me to be the founding member of them.
And back at the time, I started off from the beginning. I was intern. Initially, I have a job at Astra, which is one of the largest in Indo. And I just quit my job, become an intern. After that, doing Fenox and then being very much fortunate, because the industry growing super fast, especially the mark at 2014, where Tokopedia hired analyst from SoftBank and Sequoia. That puts Indonesia on the map and since then, the industry been growing super fast, and I'm very much fortunate because I was in the first wave.
So since then, after I was with Fenox, somehow I get a call from Mandiri, the bank, one of the largest bank in Indo, to setup their own CBC arm. So I was 23 back at the time, and helping them setup their office, and partly on the investment stuff, I'm leading the investment. We made very good investments early in the company that are very good. The likes oflevel industry. Moka exited to Gojek, previously the largest digital company. Cashlez was one of the first fintech IPO in Indo, and then couple others exited to Mekari.
But we made very good investment in Mandiri. We started off, and we have pretty sizeable DVPI, with family becoming from subsidiary in Mandiri as well. But back at that time, they shift a bit of the focus. So after that, I get connected with MDI Ventures. They want to transform themself from initially a corporate VC for Telkom to be something else, which they don't know at the point, they just think that they need to transform. So I joined them. We see what they are doing, so we realized that track record in terms of exit. We have like eight exit now, which is one of the... We already have pretty sizeable money, we couldn't go back for fund, so we realized why don't we create more funds? So we decided that we shift from corporate venture capital to something like multistage VC fund. So we currently manage it on four active funds with a UM of $820 million across four fund trees. We have three offices now, Indo, Singapore, and also the US, in the Valley. Which we primarily invest in all stages. primarily most of the stages, from seed, series A, series B, pre-IPO, pre-money all the way through multiple funds, which allows us to back the funders from and beyond.
Since then, been very much fortunate because of that, I finally managed to setup my firm, our fund, backed by MDI Indo, which is the fund arm of MDI, which primarily leading global initiative including the fund basing, investment thesis and executions of that, and been very much focusing to build that. And very exciting with the new generations of founders that we want to back, especially in the post fund.
Jeremy Au (06:42):
Amazing. I love the story. Obviously, we'll dig deeper into the VC line and so on and so forth, but I want to talk about your time. You shared about how you struggled and you went to Sampoerna University. What do you remember about that time?
Aldi Adrian Hartanto (06:57):
I was juggling between work and the education, the learning part. Like I need to go to the class, but what I did at that time was in the morning, I took a class, and then in the middle of the afternoon, I do another side job as a telemarketer as well during that time. Which is normally an hourly basis. This is nothing too flexible. I just need to go to the office and check the phone and do some pictures. I become a telemarketer for a university, which is my own uni though.
So in my free time, I took to the telemarketer, which is for me the middle of the day, 1:00 PM to 3:00 PM. I have my other class at 3:00 PM, I took it, and in the evening, I did my part-time as an analyst in this big investment firm. Recapping the market, create some analysis based on that, then I comment that to my portfolio manager, and then in the morning, I send it to them, and then after that, go back to the class as well and so on and so on.
Finally, it was pretty... I'm not saying tiring, but we were pretty much enjoying, because I just have to do it, right? Because I need to feed my family back at the time. Firmly, what I could say was firmly more of embracing what you have. Kind of like be glad or saying that, "Oh, this is very hard and et cetera." I'm trying to do my best at that time, and at that time, I didn't have much options.
But so far, been very much paid off because surprisingly, everything that I did in my uni very much helping what I do today. For example, back at that time, in my English and also communication, but because I was a telemarketer for two years, it allows me to reshape up my communication, how actually selling myself, pitching. For investment side as well, I'm become analyst. It primarily allows me to get better understanding of how to analyze companies, how to analyze the markets earlier before I'm actually graduate, and obviously, it allows me to connect with most of the people that I was connected in that space as well, since when I was in uni.
So I could say it was definitely more like being passive. Not necessarily thinking about what it is that Similar to investments, right? So we thought that I just have to do this, this is good for my current time, and I think in the long run, it would be very much paid off as well.
Jeremy Au (09:25):
If you don't mind me asking, why were you helping out for your family? Was it your parents or what was going on there? If you don't mind sharing.
Aldi Adrian Hartanto (09:31):
No, no worries at all. As I mentioned earlier, my dad passed away when I was 18, so I just graduated high school. And he was an entrepreneur by accident, because if you remember in 1998, we have Asian financial crisis. He gets laid off and somehow cannot really be picked up. So he just working by himself, he was in the textile industry, which is not really hard. And one of the things that I learned, which is one of the reason why I took finance at that time, because he was being swindled by a lot of guys, because he was a pretty bad entrepreneur, so he doesn't really understand the whole numbers and finance stuff. So I come to a sense and say, "Okay, I need to understand that, because finance and accounting is the language of business. Otherwise, my whole family will end up like the mistakes that my parents had done."
And because my dad passed away, we didn't have any assets. Back at the time, I calculate my debt to asset ratio was obviously over the roof, because we didn't have any assets, we have some debts as well. Not that much, but in terms of the ratio standpoint, very high. And I'm the first son, first children in the family. So primarily, I need to take over my dad. So that's why I'm trying to do my best to help my family, which initially, I thought is very hard, but somehow, especially if you have a reason to live, especially the reason is your...
Because people is very much a social people. Meaning that social creatures, where you need to have a reason to live. And my reason to live is simply I need to feed my family. That's why it pretty much become the social energy for me to just move forward, because some people thought that, "Hey, how could you do that?" Because I juggling with everything with my work, my educations, I also need to do some other activities for the building my CV. Like I took for some competition, et cetera, and in organization in the schools.
How did I do that? Initially, when I think again, yeah, it seems like it doesn't make sense, but even by the time I have my social advantage which is my family, so somehow, miraculously, that is just opening up a lot of opportunities.
Jeremy Au (11:47):
What was it like? Did you feel jealous of other students in the class? Did you feel different? I'm just kind of curious, because it's a tough situation to be in, to be supporting your family, working a job, while you're at school as well, and then the other students can just go to school. I don't know, how did you feel?
Aldi Adrian Hartanto (12:09):
Initially, exactly what you said. I felt jealous, like, "Hey, life is not fair. What did I do to deserve this?" But I started to realize that some of my friends are more fortunate, but turns out that this advantage is actually a significant advantage, because I realize that some of my friends are very much more fortunate, especially if they are coming from a family where their parents
For example, they have several businesses, or politicians or some other leader in the industry or some other field that they have. The burden is actually much bigger, because anything that you do, if you are coming from privileged family or much more privileged background, whatever that you do, which I seen so many of my friends, you will always be compared by your family or your relatives. "Oh, you're actually being accomplished because your dad is very much accomplished as well, so your dad definitely will help you out. Oh, your brother is actually doing super well, that's why you also will do super well, and etcetera, etcetera."
Where from my side, I'm actually starting out fresh. Any accomplishment that I did, even small one, people will thought that I'm a self made, meaning I do it by myself, which not necessarily the case because my mom is obviously one of the biggest associates, because some of regular parent will only say, "Hey, please don't go for schools, just help the family, just work, forget about school, let your brother be able to go for education and sacrifice for them." But my mom do the opposite. She said that, "No, you shouldn't stop taking education. You should go for minimum a Bachelor, so you'll be able to live up the family. The money will thinking about it on the way you just focus on also getting your educations."
Doing that, and the other perspective, is actually a significant advantage, because anything that you achieve, whether it's actually a small one, people will be more appreciate, and you will probably be able to feel good about it more. Compared to for example, you are being chasing with a ghost where family, your parents, relatives, brother or anyone between you that already successful, people will always thought that you actually not achieving by yourself, which not necessarily the case.
I saw a lot of my friends, despite they are very much privileged, they're killing it, man. They're really doing it because of them, not because of their parents. It might be some variable, but very small portion with the parent But people unfortunately will always perceive it as, "Oh, you are coming from privileged family? because your background." But for my side, turns out I'm finally able to make peace with it because I realized that it's actually a significant advantage because anything that I do, people will always perceive this as something that I personally achieve, despite it's not that significant or significance.
Jeremy Au:
Yeah. That's so true. I guess in a parallel, you also saw your dad was also an entrepreneur. My dad was a business person and he got totally devastated by the Asian financial crisis.
Aldi Adrian Hartanto (15:16):
No doubt, man.
Jeremy Au (15:17):
Yeah. But I'm just kind of curious. You saw your dad, did you look at him and say, "Wow, I want to be like him." Or were you like, "No, I don't want to be like him." What was it like?
Aldi Adrian Hartanto (15:29):
This is an interesting question. My mom specifically said that you shouldn't be like him, because she thought that becoming an entrepreneur is a bad idea, because it's very devastating because of the crisis, there's lot of uncertain. So she said that just become a salary man, or go for the government and et cetera. But I think from my side, it's different. I think back at that time, my goal is simple.
After what happened to my family, I just want to reach financial security, meaning for my family and my relatives, which now we are relatively in a better position. Not like fully secure, but it is much better position. I started to realize that a lot of thing that, what you call it? I want to become, still coming in, in the end, your dad will always be your first hero. And you may see a lot of superheroes, whatever it is, I don't know, man. Whatever. But your dad will always be your first role model. But I think the one that's getting more and more mature, I want to be like him, but only the good part.
Meaning that I'm firmly learn a lot of things, especially on, for example, setting up goals. He asked me one time like, "Hey, what kind of person do you want to be?" But at the time, I was like, what, 10 years? And I just say that I just want to be a rich person. And he said to me that you shouldn't make that as your personal goal. You should make it much more impactful. Just be someone that Whatever you become, someone that positively impact to other societies. Meaning that anything you do, as long as positive, then you should pursue it.
And that always be my principle when I'm doing anything. Which is one of the things why I really love kind of things that I do, just in venture capital, because indirectly and directly, anything that I do which is investing in these hydro companies that really make a difference in the community and in general in the world as well, firmly allows me to bring more positive impact to society. Seeing these companies from only 10 people to now thousands of people. Seeing from only have a couple clients, now they have thousands of clients. People feel that the product really make a change, especially for example, COVID. Our doctors when all this started off, and now everybody very much being feel good about what actually are the offer, and they are very much being appreciative to have that.
It gives me a lot of peace, and also fulfillment because of that. Having said that, what my parents said, I'm firmly still looking up obviously to my dad, but obviously there's certain things that things that my dad did. I'm trying to avoid that, but generally on the good one, I'm still very much want to be like him as a person.
Jeremy Au (18:20):
Yeah. That's so true. My mother also says the same thing. "Don't be like your father." Yeah. It's okay. Growing up, going hungry, you're growing up taking care of your family, you're working a job. Your first job was as a telemarketer, I'm so curious about that. What was it like? Because we all know that bad rap that telemarketers have, but what was it like growing up and your first job being a telemarketer?
Aldi Adrian Hartanto (18:51):
Oh, it was very hard, because I'm not sure you're following stuff like personality. I'm basically an introvert. Again, MBTI. [and introverted. So I didn't really like to talk people, but again, I need the money anyway. So this is one of the job that I only get. And I realized that I'm not really good in community, so it's one of the things that's really hard for me, but that's the only job that I could get in my first year, so I took it.
And the first couple weeks was horrible, I could say from my side, but I'm very fortunate, because very hard, especially if you are not someone that regularly... Not being used to even socially to communicate a bunch of people at the same time, convince them to do something that you want, and those kind of stuff. It was horrible in those first couple weeks, but I was very fortunate that my mentor there at the time, my boss, very much passion on me.
After that, I took my call, every call in the first two weeks, my mentor, after I took my calls, he calmly sit besides me, hearing what I'm doing, how I do the pitch, and then after he calmly, very passionate and being patient, taught me, "Hey, man, you are talking too fast." Which always is my problem if you realize it as well. "You should be slow down a bit. Make a bold point on what you want to say. Make it more informal, don't straight up to what you want to say, and don't sell..."
And one of the things that I learned if you watched the movie of Wolf of Wall Street, sales is not about selling things. It's about be able to bring a solution to their problem. You should be a consultant. You should ask them about their family, what's their problem, see what's the pain point that they have, and then you're kind of slipping in our pitch that potentially could solve their problem.
And you also need to be able to spot where which one that actually hot, kind of like the pipeline, and the one not really hot, because that way, it allows me to really help me out the moment, especially three people. Which really helped me out when I was calmly talking with thousands of founders over year, to really be able to read deep in the lines on whether these guys actually saying what they want to say, especially you are going to great companies, where sometimes they actually do the other way around, when they are pitching to you as a startup. You actually want to pitch to take our money.
So that actually very helpful to really help me with the current job, which firmly really shape up how I communicate, how I actually be able to be more subtle, in terms of saying what I want to say without turning them off in the middle, which firmly, again, very fortunate with all the experience I have back in my first year as a telemarketer.
Jeremy Au (21:47):
Now I'm so curious, what did you sell as telemarketer?
Aldi Adrian Hartanto (21:51):
I was become a telemarketer for my own university. My university was relatively known. They are not much people are primarily having... I was the second batch at that time. So I become a telemarketer for my own university, so primarily looking for... And our mission is that for people to join for the next batch of the students. That's what I'm selling, is obviously the dream.
The proposition that they have was, back at the time, they will actually be able to have two years in Indo is equal to two years in the US, because they have a partnership with a company called in the US. As you know in the US, when you go to the community college, you could transfer yourself to much better university after that for a full Bachelor degree. But offering that, instead of...
And obviously as you know, when you are studying abroad, the biggest cost is not the school, the biggest cost is your living. Paying for the apartment, paying for your daily life and et cetera. So with this, you don't have to stay in the US for full four years, you could just stay in the US for the last two years. The first two years you could just took it in Indo, and a fraction of the price.
So that's for me what we want to say. At the time, I'm trying to understand is mostly the hot list that I'm looking is obviously from government, from international school, the one that look to study abroad. And I told them in advance, "But if you want to save your money a bit forby studying two years in Indo which equal to two years in the US." Which for me, I'm always asking, "What kind of school that your kids aim?" Or if I talk with a student, "What kind of school do you want to go?" They will mention, "I want to go to Harvard, I want to go to Stanford, and like you, etc etc."
And I said to them, "Hey, but do you know that cost for you to complete the Bachelor degree will reach up to around 400K?" "Well, how come?" I said to them, "Despite your tuition, might only spend around 100K something, but you need to spend.” "Oh shoot, that's very expensive." And then offer them, "Oh, but you actually could be able to cut it off a bit." "Oh, how come you could cut it off a bit?" "You actually could do it by doing two years in Indo, which obviously a fashionable price." And they'll start asking more. "Oh, how come? How can I do that?" And then that's how I'm finally coming in with all the pitch. That's what I'm saying, selling the dream. Same like all the entrepreneurs and founders, man.
Jeremy Au (24:28):
Yeah. No, thank you so much for sharing about that. I think it's a tough job. I never did because I heard it was a tough job on campus, so I did some other jobs instead. I think what's interesting as well is that you shared that your mentor helped get you to your first job, and then private equity, and then VC. Who was your mentor? How did you find your mentor?
Aldi Adrian Hartanto (24:49):
It was coming from my senior in the school. Somehow, I'm also having a social with myself and my colleagues in uni, including my seniors as well. And somehow, my senior get connected to my first mentor. His name is He probably now is one of the as well. But we connected through my senior, which my senior was helping him for other business, kind of like in radio related to finance, financing major back at that time. It was.
And then he said his boss, which is my mentor, said that he's looking for a part-time analyst. And then, okay. Then he noticed that I'm very much interested in finance, and he said, "Hey, why don't you apply?" I said, "I need the money and definitely want to do." This actually get my first lesson and why I really respect him, because he give me a very good lesson in some situation.
During the time when I joined him, he said that, "You're like me, blah, blah, blah." And then he offered me a job, and he give me a salary per month around 50K. I'm sorry, around 40K. Sorry, $40, 40 bucks. Which is like 500,000 in Indo. And then back at the time, I didn't negotiate. I just, "Okay, I need the money, I'm desperate." So I just took the money. Which obviously is very low.
After a couple months, he said to me, "Hey, man, if you actually negotiate to me, I could give you up to 150." Like, what the heck? Why you give me 50 for so low? "It's negotiation, man. I give you low blow and you negotiate." So this first thing to do if you want to negotiate, never give the real price since the beginning, and when you get offered it then negotiate, because definitely they have something under their sleeve.
Okay, lesson first thing. Since then, he's been teaching me a lot, giving me a lot of wisdom and a lot of things, especially I did finance. And one of it in the venture capital, which he was very much connected with a lot of Japanese investors, which at the time in 2011, and even since the beginning of Indo, always Japan corporate or investors always be the first believer of Indonesia. All of the early industry of Indo manufacturers, the automotives and everything are coming from Japan.
Including in the VC industry, because there's many a time, most of the investors are coming from Japan. Like these vendors, like these Japanese fund, where we have vendors, we have. Those are Japanese business. Including Fenox Venture Capital, because Fenox is based in the US, but most of their LP's are coming from Japan somehow. The proposition that they have, they want to bring innovation from the Valley to Japan.
During one of their discussion with their LP, they mentioned, "Hey, why don't you go to Indo? This is the next frontier." That's why my mentor connected with someone in as well, because of these Japanese affiliations, and back at the time, unfortunately the company has to close down for these investment firm, and he actually moved to the other fund. Now he's just running the energy investment arm of Idea Infrastructure, which is one of the leading energy fund in Japan.
When we closing down the company, he kind of refer me to these guys from Fenox, and then after that, I checked with them, and they said they're looking for intern. So that's how I got the job. I never expected to be in VC, but somehow through these relations and for my first mentor, I get connected.
Jeremy Au (28:38):
Wow. Amazing. What a story. I'm just curious, at least for your mentor or your first boss, he told you you should negotiate that. Did he bump up your salary after that?
Aldi Adrian Hartanto (28:49):
Not at all, man.
Jeremy Au (28:51):
So he told you you should negotiate a higher, he didn't raise the salary?
Aldi Adrian Hartanto (28:55):
Exactly. Even after I asked. And then he said that that's not how he works, man. He said, "You should earn it. You should be able to pitch me why I should increase your salary, because you are not doing more stuff. You need to earn it." And then back at the time, especially since I was very young, I was still 19 back at the time, I didn't have much proposition. And again, sometimes the mentality, because I was desperate for the money, so I didn't be able to think creatively and how should re-pitch them to increase my salary.
Even until we part off, he didn't increase my salary at all. Which very much cemented in my mind, "Okay, next time, I shouldn't settle for less. I should negotiate for anything that I have." So it's a very good lesson though.
Jeremy Au (29:38):
Okay. So he did it in order to toughen you up.
Aldi Adrian Hartanto (29:25):
In certain level, yes. Which helped me out negotiating with founders though.
Jeremy Au (29:48):
Yeah. Okay. It's interesting, because you spend... Fenox, Asia Strategic Advisory, PT Astra and at Fenox, you were working a lot with the Japanese teams, right?
Aldi Adrian Hartanto (30:04):
In certain level, yes. Somehow, I guess I got through.
Jeremy Au (30:07):
Tell us more what was it like? Obviously, the Japanese capital is flowing to Southeast Asia. What was it like working with Japanese LP's and stakeholders across these three institutions?
Aldi Adrian Hartanto (30:18):
This is one of the things that I started to learn in terms of building relationship, because Japanese, from my experience, candid point of view, may be wrong as well, they kind of become the foundations of Asian business relationship in general, where it cannot be bought, it has to be earned. And relationship, it's like investment, it takes time. So you need to do small things gradually and being consistent to really get something out.
For example, when I'm helping my first one, which is Fenox, when we are approaching, it took really long. It took them around since we first met them, until they finally make decision to be an LP, when I see it on the site to my boss, it took them almost nine to 12 months. And then spent around dozens of meetings, which normally in the first place, what I learned from my boss as well, he never pitched directly. He's pretty much gradual and slowly building the relationship.
Initially, we just make introductions, have very good drinks, and after that, we're exchanging business cards. And after that, we started to give them more and talk leadership. Like, "Hey, this is what happening this particular market." We give them so teller information about they need as a corporation as well, and et cetera. They're gradually opening up more and more. And finally, which the thing that I didn't like, one day they finally decide that they want to partner with us, even if we could say screw up or certain stuff, for example one of our investment flop, or we see that happen as well, they didn't kind of pointing fingers to us like, "Hey, we already trust you fully. We are in it in the ups and downs."
Which something that I respect and I learned a lot that day. You cannot buy relationship. You need to earn it, and it's like investment, which takes time. What matters is not something that one thing or two things that you did, anything that you did to these partners really matters. For example, one of the things, I remember one piece that my boss have, which is one of the corporations, and I said to them, "Hey..."
When we have get together in the Valley. So I came there and my boss invites all of the LP's as well. I met some of the LP's there, and we chat. Like, "Hey, what's the reason why you put money on us?" Because obviously, they have a lot of other options in the Valley. It's very competitive. They just said, because I was an analyst, he said that because primarily every time they come to Japan, he always bring me, what you call it, my favorite drinks.
And beside that, he knows even that little... And he said they only mentioned it one time. If that, he tell they really on me, what about the other things? So those kind of stuff, it turns out, really build up your trust and I believe that actually, although there would be definitely agree for other countries or race, or for example certain background, but in the end, building the relationship and having this like Japanese is, what you call it? You cannot buy the relationship, you need to earn it. It's like. What matters is not just one, two things that you do, it's what you consistently do it and being very much sincere in what you do.
In the end, they will realize that, "Hey, we've been working together for the last couple of months, and I really like the whole interactions that we have, and I would love to strengthen our relationship by investing to your fund." Which I very much learned the hard way when our fundraising at the moment.
Jeremy Au (34:43):
Wow, that's amazing journey. Really learned a lot from that, I can imagine. I'm so curious, okay. You're doing all this Japanese capital, all independent entities, and then you go to Mandiri Capital, right? That's a capital VC. Why did you choose to go there?
Aldi Adrian Hartanto (35:04):
Again, it's not my design as well. By the time I was still in Fenox and was having a pretty okay career, because. I got promoted couple times, but background, my mother still wants me to work and become a salary man. "Hey, why you work?" Because another side story, when I took the job in Fenox, I was kind of still with Astra. We just in Indo at the moment. And my mom liked that, obviously, because, "Oh, you are in a very stable job following your dad. It's good for you, blah, blah, blah."
And then suddenly, I want to take this new endeavor, which is in Fenox, and obviously for my mom, "What is Fenox? What kind of company is this? Blah, blah, blah." Obviously, when I say venture capital, they cannot connect that. So it's very tough, and then I make a deal to my mom like, "Hey, if I didn't earn this particular salary at this level, I will quit my job. Give me a year." So I did it, I'd been promoted, and I make.
But still, my mom kind of nagging me to, "Hey, why don't you work in other places that are bigger? Blah, blah, blah." And then by that time, okay, I don't want to piss my mom, because I owe her a lot. somehow I get connected with Mandiri. Mandiri want to setup their own VC firm, and that's actually one of the ugly generations of corporate venture capital, because back at the time, we have couple of VC's in 2012 and 13. For example, Ventures. We have also Ventures now become Ventura Capital, back in 2012, 2013. But most of them are very much capital gains enterprise.
The first CVC in Indo technically started off by MDI, MDI Ventures which is backed by Telkom, and followed by Mandiri, Mandiri which is another banks. So they just want to setup their own CVC, and somehow, I got connected by Mandiri and then he wants me to lead the investment, because they already around six months, but because most of the background in the team not coming from VC, they cannot close any deals.
So I get connected with them, I pitch my idea, and then finally, somehow they offered me to lead the investments. And then when I got the offer, I think about, "Hey, this is going to be a very good pitch for me to my mom." Because I said to her, "Hey mom, I'm currently working for a stable enterprise. It's a very stable job, mom, so you'll be happy." Or this could be, now I could tell my friends that you are working for a stable bank, which I'm not actually. I'm working for a VCR. But technically, half true. So that way, I will be able to make peace with my mom and I'd still be able to do what I love, which is in the venture industry.
So that's one reason why I took the job, but the job is interesting as well because I'm setting up the whole thing. At the time, they have process for investment, but they don't know what they want to invest, so I'm pretty much involved in the whole first iterations on development. That's one reason why I took the job, which so far been one of the, what you call it, best opportunity that I took.
Jeremy Au (38:23):
Awesome. We're going to dive into it, but I'm so curious now, how do you explain venture capital to your mom?
We call itmostly meaning that's something that shouldn't be done by a Muslim community, which my mom, again, angry to me and, "Okay, I need to do another stuff that makes her feel comfortable." And then I'm starting to realize that in a firm, you have], but you're actually sharing profits when the company is able to be exit.
Which technically another Muslim law or Muslim economy, we call it Shariah. This look like a Shariah financing. So I say to him, "Oh no, mom, it's not the pure conventional bank, it's like a Shariah bank, so it's not an interest. I get through sharing profit." And then she started to, "Oh, this actually good. This looks like a Shariah venue." Meaning that you're actually doing good deeds. You are following the Muslim culture and blah, blah, blah. "Oh yeah, mum, I'm following that."
So now when I explain to my relatives and my mom especially, I'm working in a Shariah bank so I give it split income, but not in the form of a loan, but in form of investment. Which technically the same, mom, so you don't have to worry. So that's how I explain venture capital to them.
Jeremy Au (39:39):
That's great. I love it. That's a great explanation. I think it's a very fair analogy as well. Wow, that's amazing. I think for me, my mom had no idea what management consultant was, and at some point, I kind of gave up, because like you, I was trying to explain and about half an hour. I even tried to go back to her and I said, "Hey mom, you know you always wanted me to be a doctor, right? A management consultant is a doctor for the company."
Oh, that's actually very good. Very good analogy as well. I didn't explain that. My brother is actually a consultant as well, and he didn't pitch that, and my mom still angry. I should give him that analogy as well, and thanks for that.
Yeah, yeah. Exactly. Doing a diagnosis of the problem, you see the symptoms, then you talk to the patient, and then you get them a prescription, and then you make sure they follow the medication. Yeah, yeah, yeah. Okay. Then you had Mandiri, and then you go into MDI, right?
Aldi Adrian Hartanto (40:44): Yep.
Jeremy Au (40:45):Tell us more about that. How did you make that move?
I'm very much happy in Mandiri back at the time, which we were managing investing in pretty great companies. Pretty much in the early fintech operations or fintech in Indo, especially since the new regulations on the B2B landing kind of kicked off the industry, which is finally back in 2018. Sorry, around 16. 15, 15. Early 15, early 16. 2016 start off the fintech vibe, which brought me to Mandiri. We managed to invest from the earlier years, which now one of the largest players now. Koinworks, Investree, Amartha, and others.
But in the middle, they started to shift their strategy, which normally you want to focus more on the companies that directly have some synergy or commercial arrangement with the bank. Which for example, which probably not something that, what you call it, false or not incorrect, but it took them longer to invest. And second of all, was because Mandiri is a bank, so they're under pretty strict regulations. They only be able to invest in pretty much pure investors.
So I pitch to my boss that hey, we should look for other segment, which now currently becoming a jargon as well, called M&A finance. Meaning that you shouldn't just invest in payment or landing companies. You should invest in companies that enable humans or enable financial service. That way, that will be the future of fintech. But back then, it was very strict because of regulators. We started looking for directions, and when I talked to my management, we agreed that I might not be the best person to do it.
Because my philosophy of working always be that I'm not working for the company, it's pure partnership. I help you, you help me. Meaning that we have commonality in terms of the goal, and we primarily helping out each other to reach our common goal. Now we have different goal, then it might not be the right cost for us to continue working together. So I tell that to my management, then they understand, so I promoted my successor, hiring some of the other guys to replace me, which at the same time, back at the time, MDI is starting to have some changes. Back at the time, some of the team also embarked on a new journey, and may also realize that we are exceeding some of the other digital innovation at certain enterprise.
Some of the guys from, what you call it, MDI moved to creating ventures. One of the guys go to Pegadaian, which is one of the largest pawn shop in Indo. They started the digital... Actually, some of the guys switching with me in Mandiri as well. So finally, most of the guys, original team of MDI, mostly seeking out the other CVC's. I'm finally replacing some of my colleagues there, which actually goes.
I embark to this new endeavor to other corporates, which brought me to MDI is in translation, which something that's interesting for me, because most of the time, in my career, which at Fenox and Mandiri was always be about starting over. Well, this one is more of how to transform the company. They're already established, they already have great portfolio, so how to take it another level. I'm very much intrigued with that direction, and I'm pretty much given a blank canvas as well when I get to MDI.
The management told me, "Hey, just tell me what will be your suggestions. We need to redefine our thinking, because we've been doing the same thing for the past four years, so we want to change." I pitched to them, because somehow they already in the process of getting license in Singapore. They have a very good track record, especially on the exit part. That was later down the road. And then we just exit in 2019, I pitched to them, "Hey, I think we should transform. The corporate business is still there with just the money that we get from Telkom, but we should also setting up the fund primarily to cover multiple stages."
And how come? Because back at the time, we also thinking that because Telkom experience is more of big corporate, better for them to work with company with pretty sizeable revenues or transactions. So we shift with MDI to focus more on series B and above. So we shift feeling the other bank for series A and seed fund, which that's what we did. We launched our series A fund last year, end of 2019, and we launched our seed fund last year in 2020, and finally, we also closed our second fund with Telkom, which primarily $5 million fund in middle 2020 to focus more on the series B and above. Since then, we’ve been transforming from corporate venture capital to some more multistage VC fund nowadays.
That's kind of my mission when I joined, and so far, it's been partially materialized, which very much as well.
Jeremy Au (46:01):
It's interesting that you've pretty much been there since the beginning of the VC scene in Indonesia, and you've also seen the evolution of the corporate venture capital side as well. What would you contrast, how have you seen the change happen for corporate venture capital?
Aldi Adrian Hartanto (46:17):
Obviously we believe it will continuously changing, because initially, the pitch that we have to the corporate was they need to innovate. And if you want to innovate, you cannot just rely for the interna, which primarily become pure cost. You won't get your money back because it's a pure cost. You're doing some research in the development sector. Which we offer them, "Hey, why don't you have external radar? Where you could understand what would be the next trend by investing to these companies, and if the company is doing pretty well, you make some money out of it, and if they are not doing pretty well, which we get across, which is basically something that you do in R&D now."
That's the initial pitch that we have, which become an external innovation arm for the corporate or the group. But since the company's been doing pretty well along the way, which been technically since the iterations on MDI, one of the first CVC, it's been around five years now. Which we suddenly realized that, hey... Initially, we put the side capital in. We are more focusing on the energy or how companies that we invest could bring value or collaborate with the corporate or the that we have. But turns out that with this collaboration proposition, allows us to be able to get in the pretty good companies.
Which for example, we got one of our first is MBL, which we have a couple other companies that seem to raise pretty big round to be and credible e-commerce, and somebody either says, "Well,] we're doing pretty okay despite that we are looking also for not only just capital, capital gains." They start to realize that, hey, initially, we are positioned as external vision, but also cost centered.
Meaning that we are not expecting any returns on our side, but since we already have eight returns now, and we already have pretty sizeable as well, which impacting their PNL and suddenly, "Oh, wait a minute, you guys actually be able to be a revenue center or profit center for us. And by that time, you guys only managed 100 mil, why don't we put you more money? That way, for example, if you make 30% IR, certain percent IR, you'll be able to bring more value to the group from the profit or revenue standpoint."
Since then, that's why they double down to us. And another part as well that they start to realize that, hey, why don't you guys also, because you have, and we start to have some iterations on the LP. Other LP's, they want to put money on us, and then we start to realize that, hey, why didn't we raise money from our side to validate whether this is just pure luck or you'll also be able to manage other people's money? You will be able to create a conscious investment.
Which we see that some of the other VC's going to that particular path, with just Mandiri alone, my previous fund, they were setting up their own independent fund as well. I think, what you call it? The economy more cruising withas well, to doing only DV growth. CCV, that also ties in with some of the other VC's as well, primarily the type of fintech Ventures, they also started off their own other funds. I think the evolutions for the CVC, I think they started to realize that besides initially using only pure cost center, or pure for innovation, but I think gradually the group will start to appreciate that, especially if the fund doing pretty well and some return, that this is not only just as a cost center, but it will also be profit center now. Which they started to expect us to be able to drive more and more profit.
For example, last year, we'll become the second most profitable subsidiary in Telkom after Telkom Cell, which most of the other companies all been around 30, 40 years. 15, 20 years. We've been only five years. The people in Telkom have been starting to go, "Hey, you guys are doing pretty good job." Which in the next level that we are trying to shape up in Telkom, is we want to be like M&A feeder there for Telkom, because they realize some of the other corporates that through their strategic investment, allows them to catapult or transform the services.
Some of the competitor we look is, I'm not sure you're aware, it's the largest African. Initially, they only started off in a mini business. Now they are pure in the map digital business. Especially because of their early investment in, and now they are also the largest investor in That's kind of the direction that we are trying to go, where we are becoming a digital M&A feeder for Telkom, so they will be able to build their digital business moving forward through these inorganic activities from MDI.
Jeremy Au (51:25):
Amazing. You've seen more corporate venture capital, you've seen more EUM, you've seen a focus towards more seeing you as a profit center, and so the future is all those three things, as well as hopefully seeing there's being more M&A opportunities in the future. Is that a good paraphrase?
Aldi Adrian Hartanto (51:46):
Yes. That's what we hope. That will be our goal now. So far, the profit center technically been realize. The last part that I mentioned is the M&A feeder will be something that our next milestone.
Jeremy Au (52:00):
Wow, that's amazing. I think that's something a lot of the American corporate VC's are using to not only, of course, stay ahead, but also it's a value proposition to founders as well over the longterm as well.
Aldi Adrian Hartanto (52:12):
We hope so.
Jeremy Au (52:14):
Yeah, for sure. It's always hard to manage and be the bridge. Be the middleman, I guess. You have a tougher job.
Aldi Adrian Hartanto (52:22):
And you are navigating with these guys in the parent companies where they've been doing this for past 20 years. And somehow, imagine what you did in the past 20 years actually not moving forward. The frictions always happen, but I think we've been doing this for the past five years, and we've also been able to show some track record. So they are starting to be able to give us more trust, which allows us to be more agile in terms of navigating. Which we hope that this momentum allows us to make our goals realize sooner as well.
Jeremy Au (53:02):
Well, pretty much coming on time here. I was going to ask you so many more questions, but I always like to ask this question to wrap things up. Which is where were you 10 years ago? Back 2011.
Aldi Adrian Hartanto (53:15):
I just started out my uni, man. 10 years when my dad passed away, man.
Jeremy Au (53:21):
Okay.
Aldi Adrian Hartanto (53:24):
My perspective, 10 years ago how my life really started, because I had to reset a lot of things.
Jeremy Au (53:32):
Oh my gosh. 10 years ago, you were grieving. What advice would you give yourself back then if you could travel back in time?
Aldi Adrian Hartanto (53:38):
Interesting questions though. One of the things that I hope I could, what you call it, I would took my time more on the grieving part, and also at the same time, be able to make peace with what happens that I have earlier as well. What I mean by that, because back at the time, I kind of pushing myself being... Because I obviously was struggling by that time. My dad was relatively healthy. He didn't have any problems in health. We were literally still chatting with him last night.
We just coming back from my grandmother hometown in, and in the morning, when he took prayer in the morning, somehow he's been cold, which is very shock to me, and I was rightfully grieving. But surprisingly, really short. I only grieving around three days, because back at the time, I thought that, hey, I haven't received yet any schools yet. I don't know whether I could be able to go to Bachelor. So I thought that, hey, I need to move on as soon as possible.
But it kind of hit my quite a lot at the time, because I was still 18. It was pretty big thing for me. It makes the grieving actually longer than I should be, because I'm pushing myself out of grief too soon from my point of view. That way, it's very painful in the next one, two years, because I'm still miss him, I'm still thinking more and more about what if he's still alive. But if I took my time for grieving, so for example, not only just three days, but for example a week full, it might actually be different for my mental state back at the time.
Another problem as well that I hope that I could do earlier is I want to make peace to myself, because one of the implication because I not took my time for my grieving, it also took longer for me to accept the situation. I'm always question myself, even sometimes angry to God. "Hey, why would this happen to me, to my family? We never did anything wrong. We just trying to live our life. Why it's happen?" Those kind of stuff.
I hope that I could be more mature earlier, where after I did my grieving, I'd also be able to make peace with myself earlier as well, which probably be able to lift my life better and sooner, because back at the time, it probably took me around two years for me to really make peace with myself, to really accept that, hey, this is what happened. I just have to move on, live my life, being in present, be there for my family and doesn't have to think about what happened in the past. It's already happened. Doesn't have to think, "Hey, I wish I could do different things, blah, blah, blah." But it's already happened, you just have to move on, and that way, be able to be a bigger person. Not only just for yourself, but hopefully for your family.
That way, I hope that not only I could took longer grieving, which allows me to healing better, while also be able to be mature earlier, because I could accept the situations faster and better than prolong that back 10 years ago when I was 18.
Jeremy Au (57:05):
Wow. Thank you so much for sharing. Wow. As we wrap things up, and maybe you have time for a few more questions or not, if anyone in the audience wants to raise their hand, feel free to raise hands. But Aldi, I want to say thank you so much for... I think three things that really stood out to me from my notes here is, I think the first of all, thank you so much for sharing your personal journey about your childhood and your university life, going through grief and personal loss. Obviously it's a very real story, and thank you for being open about it, and also sharing how you transform your spirit, I think, at that time.
And the second thing was thank you so much for sharing your decisions at each career transition in a very honest way. I thought that was really, really frank and really good. And thirdly, thanks of course for... You know so much about corporate VC, and that was a very succinct forecast of how it's going to change for the Indonesia CVC landscape, which is really important for everybody here listening here.
Aldi Adrian Hartanto (58:07):
I hope so, man.
Jeremy Au (58:09):
Okay. Aldi, thank you so much. I really appreciate you just sharing everything about this.
Aldi Adrian Hartanto (58:15):
The pleasure is mine, man. Thanks for having me.
Jeremy Au (58:18):
Thank you so much.