Indonesia President Joko Widodo (Jokowi) is said to be launching a so-called “Merah Putih” Fund, a local fund for startups and unicorns in the country, according to local media Tempo.

State-owned companies will be directed to help with this new funding, the report added.

“The initial investors are three state-owned enterprises (BUMN) venture capital, and several large BUMNs that are currently digitizing themselves,” Deputy State-owned enterprises ( SOEs) Minister Kartika Wirjoatmodjo was quoted as saying.

Kartika said that there are three criteria for startups and unicorns to fulfill in order to receive funding: namely the founders of the company have to be Indonesians, the company has to operate in Indonesia, and the controlling shareholder has to be Indonesian investors.

Previously, the news about the launch of the Merah Putih Fund was unveiled by SOE Minister Erick Thohir. He said preparations were being made and it was hoped that Jokowi would launch it in mid-December.

He said that there is huge potential for unicorns in the country but so far many have complained that the funding comes from foreign investors. “We ourselves have never gotten involved in these digital activities,” he said at the Digital Technopreneur Fest event last Friday.

Besides the three criteria mentioned by Kartika, Erick also said the company which receives funding must go listing on the stock exchange in Indonesia. “IPO must be in Indonesia, not in Singapore,” Erick was quoted as saying.

The news came as the tech industry in Southeast Asia including Indonesia is booming. Last year, 52 startups in Indonesia were able to raise $1.9 billion, according to the Indonesian Venture Capital and Startup Association (Amvesindo).

Southeast Asia has around 400 million internet users. This year, it is expected that around 80 percent of the region’s population (aged 15 and above) will be classified as digital consumers, according to a report by Facebook and Bain & Company.


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