The Adoption and Regulation of Digital Signature in Indonesia

Digital signatures have started to get more popular amid the rapid increase of digital services, especially in the financial sector, such as in banking applications or fintech. Using this opportunity, startups engaged in providing digital signature platforms are starting to maximize their presence.

According to the Electronic Certification Center (BSrE), part of the National Cyber and Crypto Agency (BSSN), a digital signature is an electronic signature used to prove the authenticity of the sender’s identity of a message or document. In addition, a digital signature is an electronic signature that has been certified. The main purpose of the digital signature is to rapidly secure documents or documents from unauthorized/authorized parties, including protecting sensitive data and powering trust.

Meanwhile, according to Law no. 11 of 2008 concerning Electronic Information and Transactions, an electronic signature is a signature consisting of electronic information that is embedded, associated, or related to other electronic information that is used as a verification and authentication tool.

Current regulation

In Indonesia, digital signature startups are involved with three regulators, including the Ministry of Communication and Information, the Financial Services Authority (OJK), and Bank Indonesia (BI).

First, at Kominfo, Electronic Certification Providers (PSrE) is supervised by the Information Security Directorate. PSrE was formed and operated in accordance with government regulation No. 82 of 2012.

Based on these regulations PSrE is divided into two:

Public PSrE; the operator of an electronic certificate/certification authority (CA) run by the Indonesian government under the Directorate of Information Security, Kominfo, which issues electronic certificates for Public PSrE,
Private PSrE; electronic certificate operators that have been recognized by the Parent PSrE to run digital certificate services by individuals, organizations, or electronic certificate administering business entities.

Moreover, under the auspices of the Ministry of Communication and Information, startups playing in this area are included as Private PSrE. In terms of players, the government also divides it into three recognition stages, as follows:

Registered; given after PSrE meets the requirements of the registration process set out in a Ministerial Regulation.
Certified; given after the certificate authority has met the requirements for the certification process set out in a Ministerial Regulation.
Parent; given after the PSrE has obtained a certified status and obtained a certificate as Parent PSrE; including the audit process.The following are the players who have registered as PSrE in Kominfo, data accessed as of 18 February 2021:

Second, at OJK, the players are currently hosting Digital Financial Innovation (IKD). Based on POJK No. 13/POJK.02/2018, the IKD organizer is currently in the process of researching and deepening its business model through the regulatory sandbox mechanism until finally proceeding to the registration and licensing process which will be regulated later.

The specific cluster to facilitate digital signature startups is e-KYC. In this regulation, e-KYC is defined as a platform that helps provide identification and verification services for prospective customers using data population from Dukcapil. The service is integrated with various applications that require transaction processing – several platforms are also starting to place biometric verification as their main foundation.

In this cluster, as data updated per August 2020 there are four registered players, as follows:

Third, at BI, the players are under the regulatory sandbox in the Information Technology category. Specifically, BI regulations focus on the use of electronic signatures for submitting banking services such as credit cards. From the current digital signature players, there are three names that have obtained a license from BI, including: PT Privy Identitas Digital (PrivyID), PT Solusi Net Internusa (Digisign), and PT Indonesia Digital Identity (VIDA).

The development of digital signature startup

In Indonesia, PrivyID is a pioneering startup providing digital signature services. The Co-Founder and CEO Marshall Pribadi said to DailySocial that his services have been used by around 700 companies of various business scales — 6 of which are 4 national book banks, 3 telecommunications operators, 5 global insurance companies in Indonesia. In addition, PrivyID has also expanded the use of its services in other sectors such as education, energy, manufacturing, and recruitment agencies.

Furthermore, Marshall exemplifies several case studies on how the implementation of digital signatures can provide business efficiency. For instance, in Generali, the finalizing process of illustration form and a Life Insurance Request Letter, which previously took 3 to 5 days, can now be shortened to just 1 hour.

Another implementation is at Bank Mandiri, PrivyID supports the online account opening process and makes the process completely paper-free. At President University, digital signature services are used for the purposes of signing cooperation agreements, NDAs, etc .; including conducting API integration for the signing of diplomas and transcripts by the chancellor and dean.

PrivyID secured Series A2 funding at the end of 2019. The list of investors include Telkomsel Mitra Inovasi, Mahanusa Capital, Gunung Sewu Group, MDI Ventures, and Mandiri Capital Indonesia.

Co-Founder & CEO PrivyID Marshall Pribadi / PrivyID — PrivyID’s Co-Founder & CEO, Marshall Pribadi / PrivyID

In addition, there are some similar players which already run its services. The latest one is TekenAja, a joint venture under GDP Venture. It is based in the same company as the developer of the ASLI RI biometric verification platform (which has been registered in the IKD OJK cluster).

TekenAja’s Co-Founder & COO, Rionald Soerjanto explained to DailySocial, one of the unique selling points that his company wanted to present was the biometric verification capability. He said this is relevant to avoid gaps in system security and operational standards that is possibly be tricked – for example by using fake identities or photos.

The TekenAja service is currently used by financial service institutions to keep transactions online and safe. Users can later use the mobile application to carry out the signature process. In terms of business, there are two implementation models, either through a special portal provided or through API integration into the application system. TekenAja consumers are corporations in the banking sector, multi-finance, fintech, and retail companies.

PrivyID and TekenAja have jointly established strategic cooperation with Dukcapil for the needs of data population verification.

Digital signature penetration in Indonesia

Marshall also said that before the pandemic, about 80% of its service users came from financial institutions. It is due to the OJK’s policy which requires fintech lending services to apply a digital signature in their system. When the pandemic started, many companies in other sectors started to use PrivyID, including those in the telecommunications, logistics, energy, FMCG, and health industries.

“During the pandemic, PrivyID recorded an increase in corporate subscribers of up to 405% year-on-year. [..] It is ensured that the use of digital signatures in Indonesia will continue to increase in the future,” he said.

Although it’s getting mature, users of signature services in Indonesia are not very significant in quantity. Marshall said this is due to the lack of public knowledge about the legality of digital signatures. In addition, there are still many who do not know the benefits of digital signatures that companies can get. Therefore, he thought, user education is still being the company’s priority.

TekenAja also agreed. The Covid-19 pandemic has accelerated various things to be contactless. Soerjanto said digital signature services can be an effort to keep transactions fully online, thereby reducing the potential for the spread of viruses – for example, the direct visit for signatures on paper. In addition, to support WFH activities, offices can provide efficient HRD processes for signing permits, applying for leave, and others.

Regarding future challenges, Soerjanto also considers education of digital signatures to be the most important. “In my opinion, the challenge is only in terms of digital signatures. Actually, it is not new in Indonesia, the OJK has started suggesting from 2016. However, it still lacks comprehensive. Thanks to the pandemic, people know better as they are forced in order to make secure online transactions,” he added.

He is optimistic about the development of the digital signature ecosystem in Indonesia as the regulators are quite supportive. “The Indonesian government, both Dukcapil, and Kominfo is quite supportive in terms of implementing biometrics for digital signatures,” Soerjanto concluded.

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Original article is in Indonesian, translated by Kristin Siagian

Debt Funding Scheme Is Thriving, Amartha Scored 704 Billion Rupiah from Lendable

The p2p lending startup Amartha today (24/2) announced the debt funding of $50 million or the equivalent of 704.4 billion Rupiah (exchange rate USD to IDR per 14.00 WIB) from Lendable. It is to focus on providing capital and financial access to small entrepreneurs empowered by women in Indonesia, in conjunction with the “2X Challenge” initiative.

Through this collaboration, Amartha is also the first company in Indonesia to receive 2X Challenge funds. Particularly in the Asia Pacific, this funding initiative for women micro-merchants has disbursed up to $747 million.

Amartha does have further concern for women entrepreneurs. As Andi Taufan Garuda Putra said as Founder & CEO, women are the drivers of the micro economy which plays an important role in the recovery of the national economy.

The women micro-entrepreneurs segment with limited access to banking and financial institutions in Indonesia is estimated to reach more than 22 million people. By providing access to capital and entrepreneurship education for women, Amartha noticed that Mitra Amartha can increase income 2 to 7 times in one year.

“We are grateful for Lendable’s trust in realizing the 2X Challenge in Indonesia, therefore, women can increase their role in the Indonesian economy, especially in the context of post-pandemic recovery,” Taufan said.

The combination of retail and institutions

In a separate interview, Taufan said that they currently had channeled funds of up to 3.22 trillion to 616 thousand partners in Java, Sulawesi, and Sumatra. The combination of retail (community) funding and institutions also encourage the performance and penetration of Amartha’s services.

“On a year-on-year basis, the comparison is 55 percent for institutions and 45 percent for retail. For retail lenders, 68% is dominated by the millennial generation, followed by 19% by generation X, 10% by generation Z, and 3% by baby boomers. Based on the amount of funding value, 44% is dominated by generation X, then 40% by the millennial generation, 10% by baby boomers, and 3% by generation Z,” Taufan explained.

Regarding institutional partners, Amartha has also collaborated with banks and financial institutions to distribute funding with channeling schemes including Bank BRI, Bank Mandiri, Bank Jatim, Bank Permata, Bank Ganesha, Indosurya, and so on.

Targeting female micro-entrepreneurs certainly provides a higher level of risk (return). It becomes interesting to know Amartha’s strategy in increasing the percentage of TKB90 on the platform.

“Amartha has tightened monitoring of portfolios, operations, risks, and audits. This aims to screen the best quality Partners while maintaining the quality of ongoing loans. In addition, Amartha has updated the credit scoring system and combines the ability and willingness assessments, and a history of payment returns before the Covid-19 pandemic,” Taufan added.

Amartha also provides direct business assistance by the field team, including providing training on business alternatives for partners whose businesses have been affected by the pandemic, therefore, they can start new businesses or expand their businesses. It is said that these efforts are able to make the business climate in Amartha’s partner ecosystem return to the way before.

Debt funding in Indonesia

Previously last year Lendable also joined as an institutional lender for KoinWorks, channeling $10 million in funds. Apart from Lendable, there are several other institutions that also provide similar funds for fintech lending in Indonesia, such as Accial Capital for Pintek, Cash Cloud, and Investree. In addition, there are GMO Payment Gateway (Investree), Partners for Growth (Kredivo), etc.

In fact, there are two schemes widely applied to channel funds from institutions, loan channeling and venture debt. The first scheme is intended for institutions such as banks to channel their credit funds to MSMEs through fintech lending. Many local banks have started announcing entrance into the fintech ecosystem through this partnership. The latest is BCA which distributes funds through iGrow.

Meanwhile, venture debt/debt funding is actually more strategic in nature, such as to finance operations and growth – generally entered along with equity funding from venture investors. However, some have also used the funds to be distributed.

Apart from those already mentioned, other fintechs that have received debt funding are Alami, Digiasia, Kredivo, Modalku, UangTeman, Akseleran, and People’s Capital.

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Original article is in Indonesian, translated by Kristin Siagian

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Warung Pintar Officially Acquired Bizzy

New retail startup Warung Pintar has officially announced its acquisition of Bizzy, a B2B logistics and supply chain distribution startup. The acquisition value reached $45 million or around Rp633 billion.

Through this acquisition, Warung Pintar is to strengthen its position in the B2B e-commerce market and predicted to grow three times of the B2C market.

“[Acquisition] Bizzy as a whole, not just a particular business unit,” East Ventures’ Co-Founder & Managing Partner, Willson Cuaca said in a short message to DailySocial.

Previously, Bizzy was a B2B e-commerce platform that has pivoted into the logistics and distribution business. Bizzy Logistics is known as PT Bina Sinar Amity, an integrated logistics, export, and import service provider company. Meanwhile, Bizzy Distribution is legally under PT Sinarmas Distribution Nusantara.

Apart from being affiliated with the Sinarmas group, Bizzy is also a portfolio of East Ventures. Sinarmas, through its venture capital unit, SMDV, is also a part of EV Growth.

Ready for the momentum of B2B e-commerce

Quoting various data sources, the current B2B e-commerce revenue in Indonesia accounts for less than half of the total e-commerce revenue in 2020. As an illustration, B2B e-commerce revenue in India contributes 93% of total e-commerce revenue there and 72% in China.

Warung Pintar’s Co-Founder & CEO, Agung Bezharie said that the two companies are to realize the same mission, transforming traditional retailers, and increasing their efficiency in the supply chain, which is considered fragmented with two different approaches.

Therefore, Agung expects to change the digital-based distribution approach which has mostly been driven by massive promotions and discounts in order to acquire customers.

“Bizzy’s joining the Warung Pintar ecosystem allows the company to guarantee product availability and reasonable prices with its partners,” Agung said in a press release received by DailySocial.

Furthermore, Bizzy’s CEO, Andrew Mawikere added that after the acquisition, Bizzy will remain an entity that will focus on bridging the synergy between the two companies with brands and distributors and enabling them to become a digital retail ecosystem.

This means as the synergy established, Warung Pintar can focus more on digitizing its retailers, while Bizzy focuses on serving brand partners and distributors.

“After Bizzy’s entry as part of Warung Pintar, there will be no other players integrated into our supply chain. That way, we can serve brands and distributors with various added value and data-based strategies on a large scale,” Andrew said.

Was founded in 2017, Warung Pintar offers solutions to micro-entrepreneurs’ problems that have been the foundation of the Indonesian economy with a 70% contribution to total retail transactions in Indonesia. Meanwhile, this acquisition will combine two companies that have collaborated with 600 brands and serve 230 thousand retailers in 65 cities throughout Indonesia.

Willson also sees opportunities for synergy and efficiency that will be created by joining the two companies. “Warung Pintar is an on-demand platform, while Bizzy comes from the supply side. Combined, they can serve consumers, retailers, and brands in the most effective way. This is a real 1 + 1 = 3,” he said in an official statement.

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Original article is in Indonesian, translated by Kristin Siagian

Red Carpet for Startup on the Stock Market

The rhetoric of unicorn startups’ going IPO has been heating up since the beginning of this year considering it’s “time” for early generation’s VC investment startups to reach the mature stage, aka cash out to be returned to the LPs.

Therefore, it is only natural that the Indonesia Stock Exchange (IDX) openly announced that the three Indonesian unicorns are to get a dual listing. At least Gojek, Tokopedia, and Traveloka have been widely reported about its IPO this year. IPO is a way of exit for investors, apart from mergers, acquisitions, or issuing new shares.

Regardless of the technology startup status, the company’s ambition to go public is a very strategic decision as it requires a commitment to obeying stock exchange rules with good governance.

To date, technology startups that have gone public is not quite many. The IDX racked the brains to make IPOs friendly to disruptive types of companies and chose to focus on pursuing growth rather than looking for profit. Establishing acceleration boards, simplifying regulations, and creating the IDX Incubator program are some of the efforts.

IDX Incubator was first started in Jakarta in 2017, next to Surabaya and Bandung a year later. It is said to gather 114 startups, 62 startups from Jakarta, 24 startups from Bandung, and 28 startups from Surabaya.

To date, there are three startups that have successfully go public. Those are PT Yelooo Integra Datanet Tbk (YELO), PT Tourindo Guide Indonesia Tbk (PGJO), and PT Cashlez Worldwide Indonesia Tbk (CASH). The stock exchange officials said that there will be two startups to follow in this first semester.

Separately, DailySocial reached the Head of IDX Incubator Saptono Adi Junarso regarding the IDX Incubator evaluation. There’s no significant answer for the stock exchange study. He said his team will continue to learn and improve, therefore, the current program will be upgraded.

It requires support from various parties in order to prepare the company for an IPO. Not only from professional institutions, but also from other stakeholders such as investors, the government, and the community.

“We seek to cooperate with institutions that can support more startups and small and medium-scale companies to go public,” he said.

One of the adjustments by IDX Incubator was changing the curriculum to be more focused on helping companies with small and medium scale assets to list their shares on the IDX. This curriculum is called “Road to IPO” which has been effective since 2019.

Road to IPO has a curriculum that contains training and mentoring. With this distinction, IDX Incubator is claimed to be in a more strategic position in the ecosystem. Nor does it overlap with other incubator/accelerator programs.

“There are already some existing players for the incubation program that emphasizes business development. Therefore, we want to be a follow-on incubation program for IPO preparation,” IDX Incubator’s Operational Manager, Aditya Nugraha said.

This curriculum adjustment affects the tightening requirements for advanced startups to join. One requirement is a startup that with one step below the IPO process. However, those who join do not have to be tech startups. Conventional SMEs have the same opportunity.

Lack of enthusiasm

Apart from the three IDX Incubator graduates who made it to go public, there are 20 technology companies have run the IPOs, citing the IDX website. Five companies have been listed on the existing acceleration board. Two of those are Cashlez and Pigijo. Other technology companies are listed majority on the development board, then the main board. The acceleration board itself has been officially announced by the IDX since 2019, cited in the Regulation Number I-V.

IDX Development Director, Hasan Fawzi explained, although there aren’t many companies on the acceleration board, it does not necessarily mean that IDX missed the target. In fact, he said that the IDX remains prudent in performing its duties. Not just any company can pass the selection.

“We take a deep view of the company’s condition and its concerns about the future growth prospects. There is a mini expose for us to see from the company management perspective and whether it has confirmed business plan prospectus,” he explained.

The IDX tends to be more strict in assessing companies to enter this board as there is a responsibility to protect investors. The IDX makes different monitoring parameters because of its own board. On one side, investors are expected to fully understand all the risks of buying shares, apart from seeing the potential business being offered.

“We have required stock exchange members to submit a disclaimer for each share on the acceleration board, the interface will be different, especially for the transactions. This has been done by all stock exchange members.”

Fawzi said that the stock exchange has positioned itself as an inclusive place by offering alternative sources of funding through IPOs. “It’s possible because it is still small [the scale of the business] is still difficult to obtain conventional [financial institutions] funding sources.”

According to Indef’s economist and researcher, Nailul Huda, the stock exchange still needs a long time to grow enthusiasm for startups to go public. Basically, IDX Incubator is only a means. The success or failure of an IPO depends on the ability of the company itself.

“Currently, there is equity crowdfunding as an alternative to IPO besides the IDX. This is more possible as it is a very complicated process with the IDX and you have to deposit standardized financial reports. It’s tough for those who may not have capable financial staff.”

Another thing that may be burdensome for startups is maintaining share prices. There are many US-based tech companies which stock prices went down after the IPO. On average, they do not have a strong pathway to ascertain how the company will be profitable in the future.

“[Because] the aim is valuation. As calculated from the GMV and the number of subscriber coverage. The business model is yet to explain how the future profits will be.”

Huda also said that the concept of stock prices does not always reflect company performance.

“High stock prices with bad fundamentals will surely be a hit and irrational buyers, it’ll be brief. However, if the company’s performance and fundamentals are good, the stock price will tend to increase. One interesting example [that does not reflect the company’s performance] is Gamestop.”

When the three unicorns successfully enter the market, Nailul is not certain that other startups will immediately be motivated to follow the same steps. They definitely monitor the listing results. If it makes a good share price at the beginning, that means they are only looking for money at the beginning. After that, the stock price is no longer matters.

“It will indeed be a standard for other technology companies not to be listed early. However, if it makes a good result, it will definitely become a benchmark for other companies to list.”

Separately, at a media gathering held by East Ventures (19/2), East Ventures’ Co-Founder & Managing Partner, Willson Cuaca said that all startups must eventually be listed on the stock exchange, but not all startups can do because each is in a different stage. Moreover, IPO is only part of the cycle of a company.

For startups, the advantages are having additional liquidity and having very good compliance as they have to comply with stock exchange rules. Meanwhile, being a public company is the valuation validation for investors that have been measured before investing in the startup, whether it is a good deal or not.

“Which startups do I think should list? All startups must be listed because there is validation of valuation, liquidity, and increased compliance. But can all startups be listed? No, because it takes time to get to that point. If the early-stage startup is busy taking that step, they will not be able to make products,” Cuaca said.

Significant groundwork

The stock exchange is getting serious about encouraging unicorns to enter the capital market by making a number of adjustments. Their presence is considered to motivate other startups for listing.

Fawzi explained that his team had intensive meetings with unicorn stakeholders to discuss the obstacles. First is the demand to enter the main board because it provides more added value for its investors, than a development or acceleration board.

This makes sense given that the valuation of each company deserves to be aligned with a public company with large capitalization in Indonesia.

Therefore, the IDX is finalizing the change to regulation number I-A, this rule will later accommodate various characteristics of issuers, including technology companies for IPOs. “We really want to [enforce the rules], but now we are in the process of discussing it to get approval from the OJK.”

According to the current stock exchange regulations, there is an obligation for companies attempting to enter the main board to have tangible assets (net worth). Meanwhile, the characteristic of startups is intangible assets are larger than tangible assets. Therefore, the stock exchange will provide other measurement aspects, such as revenue and market utilization.

“We can’t deny the fact that we had not been prepared for companies which strategy development was different from companies in general.”

Second, that is a concern and currently being prepared by the stock exchange is the classification of the sub-sectors according to the business of the unicorns. The stock exchange launched the IDX Industrial Classification (IDX-IC) on January 25. This classification changes the stock exchange classification used previously since 1996, the Jakarta Stock Industrial Classification (JASICA). The transition process was run for three months.

IDX-IC uses a grouping method based on market exposure for the final goods or services used by listed companies, aiming to provide guidance for users regarding groups of companies with similar market exposure.

The categories are more detailed into four levels, sector, sub-sector, industry, and sub-industry. Currently, JASICA has classified issuers by sector based on the principle of economic activity, therefore, it is only divided into two levels, sector and sub-sector.

Fawzi explained, the IDX-IC uses benchmarks of global exchanges, similar to the index published by private parties such as Bloomberg.

Global investors will be happier if they can compare company shares to similar industrial groups in other countries. As compared by sector, it is more apple-to-apple to see the growth or performance of its peers.

“In fact, it is more comparable now. Companies that have been listed can also benefit as they were previously included in the general category, some have entered services or trading, now there is a sports to entertainment sub-sector which is more suitable in their field.”

The final request is related to the potential implementation of several rules, such as the special right of the founders to conduct dual class shares by giving different voting weight to the founding shareholders and public shareholders. Next, the multiple voting share scheme or one share owned by the founder has more rights than ordinary shares in terms of decision making.

Junarso added, in finalizing this framework, IDX will not only focus on increasing the supply side, but also on investment demand from sophisticated investors for technology companies, such as venture capital, private equity, and other investors by engaging and inviting them to enter the Indonesian capital market.

Dual listing

Dual listing is not a new thing in the global exchange world, however, this strategy is rarely chosen by most companies in Indonesia. Global tech companies, such as Alibaba and Sea Group, choose the United States stock exchange as it is the largest stock market in the world. NYSE (New York Stock Exchange) is the largest, followed by NASDAQ, which consists of technology companies.

For example, millions of shares can travel fast [per second] between buyers and sellers on the NYSE. Due to the high volume of exchange, the transaction process is relatively easy. In other words, the U.S. stock market is very liquid with low transaction costs.

To date, only a few local companies going public on the global stock exchange. Quoting from Bisnis.com, a number of state-owned companies that are making dual listings were Indosat, Telkom Indonesia, Aneka Tambang, and Timah. Telkom and Antam are the only ones still implementing this strategy.

Telkom has been listed on the NYSE since 25 years ago. The journey has not always very smooth along the way. They were threatened with delisting as they failed to meet the submission deadline of the 2002 financial report audit.

Samuel Sekuritas Indonesia’s (SSI) Head of Research, Suria Dharma believes that dual listings have a positive impact on companies in general because they can have access to bigger sources of funding. However, there is a price to pay, that regulations and reporting are often more strict than at home.

Meanwhile, for unicorns, because they are predicted to have a large market capitalization, this dual listing scheme is expected to make a broader penetration for potential investors. It will result in a chunk of fresh funds.

He described the stock price movements for the dual listing companies to adjust to one another. “Previously, it only follows the global price but now vice versa, it’s often to follow Indonesian price. It might be because Indonesian investors are getting more of the latest information.”

Willson added that the dual listing to be performed by local unicorns can combine the two best things, entering the US and local exchanges. “This is related to nationalism. If it can be dual, of course the local market will be more excited. We have to go to the US because there is a huge capital market, this is the perfect combination.”

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Original article is in Indonesian, translated by Kristin Siagian
Header: Depositphotos.com

Bobobox Expands Services, Optimistic with Local Tourism Industry

The tourism industry is the first most affected layer by the Covid-19 pandemic. Many companies are competing to develop other businesses as a pivot to buffer due to survival. The same strategy is taken by proptech startup Bobobox, which is developing several innovations outside the capsule hotel.

Bobobox’s Co-Founder and CEO, Indra Gunawan said to DailySocial that his startup was quite affected by the pandemic. However, thanks to the team persistence, the company was able to adapt quickly and continue to innovate during that time.

“As a result, we managed to get a V shape recovery that is much faster than we predicted. This is also the fact that 90% of our market is domestic, has helped us to survive the crisis better,” Indra said.

The Series A funding was announced in March 2020, which is the right ammunition for Bobobox to stay afloat. Currently, the company has launched two new products, accommodation services with the concept of co-living (Boboliving) and glamping/glamor camping (Bobocabin). There are other products currently in progress, including hourly rental single pods and campervan accommodation.

Indra explained that Bobobox and Boboliving originated from the company’s internal findings from its customers. It was found that the domestic market rose faster and used to stay in the range of 1-2 days, now it is longer by around weeks to months. This condition is reflected in the Bobobox report, where long-term guests have grown rapidly during the pandemic.

As narrowed down, there are now two types of hotel guests. First, those who still need to go to the office during the pandemic and want to avoid long-distance travel. Second, people who work from home, but do not have fast work facilities such as high-speed Wi-Fi and a safe environment. “This led us to develop Boboliving and the product was sold out within 3 weeks on the market.”

The result is, Bobobox noticed that WFH lifestyle will continue in the future, even when Covid-19 has ended. Then, today’s consumer trends are driven by self-protection and social distancing. “We want to develop solutions where people can have alternative options for work and school fees (for the younger ones).”

Bobocabin and Boboliving

Bobocabin and Boboliving take advantage of existing technology for their operations. In terms of design, Bobocabin is designed by adopting a futuristic modular design with a capacity of two adults and one child while considering the need for social distancing restrictions. Each cabin is equipped with modern facilities, supported by IoT technology to control the features in it, such as windows, lights, doors, and audio speakers that can be controlled from a visitor’s smartphone.

Bobocabin is available in two areas in Bandung, Rancupas, and Cikole by utilizing land owned by Perhutani. Respectively an area of 1.26Ha and 1Ha. Apart from the rooms, Bobocabin is also equipped with 24-hour front desk, barbecue and bonfire. The official fee ranges from IDR 450 thousand to IDR 550 thousand per night.

Bobocabin emphasizes the need for sustainable tourism through the nature-based tourism segment that offers more benefits from an economic, social, and environmental perspective.

Meanwhile, Boboliving is like a boarding house with more spacious room facilities for work areas. The rooms are prepared with 10 pods containing mattresses and wardrobes. These capsules can be rented daily, weekly, monthly, and yearly. Currently, Boboliving is available in Pancoran, South Jakarta.

“Bobobox sees the huge economic potential with the existence of a residential business ecosystem such as co-living, especially for property business activists who want to start a business yet constrained by limited land. This is also driven by the need for housing which is increasing every year, but it is inversely proportional to the availability of land, especially in big cities,” Indra said in an official statement.

Regarding the latest development of the Bobobox capsule hotel, it has distributed in several cities on Java, including Yogyakarta, Semarang, and Solo. Until the fourth quarter of 2020, this product recorded an occupancy rate of back to 80% from the pre-pandemic position which reached the 80% -90% range.

Indra is optimistic from the various sources he summarized, indicating that more than 70% are interested in traveling. This shows that vacations seem non-negotiable to many. “With a market fit for our new product, we are confident that we can reimagine tourism across Indonesia with an extraordinary experience.”

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Original article is in Indonesian, translated by Kristin Siagian

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Saturdays Boosts Omnichannel Network Expansion After Seed Funding

The direct-to-consumer startup, Saturdays, has just announced seed funding from three venture capitals, including Alpha JWC Ventures, Kinesys Group, and Alto Partners. In fact, this round was closed in 2020, the announcement is just arrived. The fresh funds will be focused on expanding offline stores and strengthening the omnichannel network.

In a general note, Saturdays offers lifestyle products with eyewear as its main business. With the DTC model, Saturdays produced its own lens and frame materials, from design, manufacturing, to direct delivery to consumers. Saturdays was founded by Rama Suparta and Andrew Kandolha in 2016.

In terms of sales, Saturdays has adopted the online-to-offline (O2O) model through websites and retail stores. Its first flagship store is located at Lotte Shopping Avenue, Jakarta, which is integrated with a coffee shop for a lifestyle effect.

Today, Saturdays also announced a new online sales channel, the Saturdays Lifestyle. This application allows users to shop for eyewear products on an O2O basis. Users can now download it via iOS and Android devices.

In his statement, Saturdays’ Co-founder Rama Suparta said that there are some integrated O2O shopping features available for users, such as online purchases, then picking them up at offline stores. Saturdays also present several payment options, including Buy Now Pay Later from Kredivo.

“One of the best features in this application is the Home Try-On reservation. This is Saturdays’ breakthrough by presenting an at-home eyeglass trial program. Customers only need to set a date, select ten frames, set an address, and get selected Arabica coffee, all for free,” Rama said.

Furthermore, Saturdays will continue to add offline store chains with a lifestyle to other big cities this year. Currently, the company has eight offline stores spread across the Jabodetabek area.

According to Rama, since the beginning, Saturdays was inspired by the unicorn startup Warby Parker who kicked off the conventional eyewear industry, by creating products that were authentic, affordable, and easy. Thus, by cutting significant brokerage fees, the company shares a vision of offering high-quality eyewear at affordable prices.

“We want to provide an extraordinary shopping experience for customers who are used to shopping with conventional and boring models. In the future, we will continue to innovate to become the dominant market leader in Indonesia,” Rama concluded.

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Original article is in Indonesian, translated by Kristin Siagian

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FUNDtastic Secured 108 Billion Rupiah Series A Funding Led by Ascend Capital Group

FUNDtastic’s investment and financial management platform announced $7.7 million Series A funding (over 108 billion Rupiah). This round was led by the Ascend Capital Group, also participated the Indivara Group and other investors.

In an official statement, FUNDtastic’s Co-Founder & CEO, Harry Hartono said, this fresh fund will be used to expand market reach and enrich products and features, to better serve the needs of the community.

“With investor confidence in FUNDtastic, we can continue to develop investment products which easily accessible, including novice investors,” he explained, Monday (22/2).

FUNDtastic is one of the investment players which harvesting during the pandemic. The Indonesia Stock Exchange noted that the number of capital market investors reached 3.54 million, around 57.5% of whom were mutual fund and bond investors as of November 2020.

This increase has an impact on investors’ interest to invest in platforms like FUNDtastic. Previously, since the beginning of this year, at least Ajaib and Bibit had announced their acquisition of fresh funds.

Harry explained that after the acquisition of the Invesee platform last year, FUNDtastic users increased nearly 4 times, reach up to 110 thousand people. This is in line with the total fund under management reaching around Rp200 billion.

FUNDtastic’s Co-Founder and Chief Investment Officer Franky Chandra said this increase was driven by several factors. Apart from the fact that the company provides products based on the needs of the community, it’s mainly due to the pandemic which requires the acceleration of digital financial adoption.

“Also, our associates have a real role in continuously educating the public, and the regulator in particular (OJK IKD) is always supportive in handling and supervising various innovations in the world of financial technology,” he added.

As an investment platform and digital financial manager, FUNDtastic offers convenience for new users, starting from the registration process, transaction speed, and convenience in investing. Thus, users continue to increase their investment in the FUNDtastic platform without experiencing any problems.

Franky is optimistic that FUNDtastic’s business growth will be even higher this year as the user continues to invest in the FUNDtastic platform during 2020.

Also for Ascend Capital, a FUNDtastic investor who sees management and team as a solid foundation in supporting business growth.

“FUNDtastic management and a solid IT team are some of the most important and valuable assets for startups. FUNDtastic also has a good business model and a strong growth strategy through marketing strategies and partnerships with other financial institutions,” Ascend Capital’s Partner, Muljadi Tjandra said.

“FUNDtastic is also capable to reach unbanked people to actively participate in becoming investors. A progressive step that can easily expand prospective new investors to invest,” he added.

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Original article is in Indonesian, translated by Kristin Siagian

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RateS Announces Series A Funding Led by Vertex Ventures and Genesis Alternative Ventures

The social commerce platform RateS today (22/2) announced Series A funding with an undisclosed value. Vertex Ventures and Genesis Alternative Ventures lead this funding. Previously, the Singapore-based startup had secured seed funding from Alpha JWC Ventures and Insignia Ventures Partners in 2018.

Fresh funds will be focused on developing RateS‘s business in Indonesia, including market penetration to tier 2 and 3 cities. The objective is to increase the number of resellers, which currently reached up around 500 thousand people.

“The benchmark for RateS ‘success lies in how much we can help increase reseller revenue and business [..] Our shared vision is to revolutionize social commerce through technology, create digital entrepreneurs, and increase digital literacy for people to run the business smoothly and more. profitable,” RateS’ Co-Founder & CEO, Jake Goh said.

Simply put, with the RateS application, people can start selling (becoming resellers) without having to buy goods beforehand. Users can set up their own stalls and select items to sell from the list available in the application. They will get special prices, which are then sold to consumers at market prices. Users focus on promotion and selling, while packaging, shipping and payment infrastructure are all managed by RateS.

“We see that the e-commerce market in Southeast Asia has developed into a competition for profit. On the other hand, RateS has discovered an effective way of entering cities in tier 2 and 3 in Indonesia, which can not only save costs, will but more importantly it has huge and untapped market potential. With the pandemic that threatened the livelihoods of many people, we are delighted that RateS has been and will continue to be a useful platform to empower those in need,” Vertex Ventures SEA’s Managing Partner, Chua Joo Hock said.

Perbandingan Social Commerce dan E-commerce — Comparison of Social commerce and e-commerce

In Indonesia, there are several social commerce services that strives to win the market with their own unique values. For example, Halosis, they focused on sales channels in the messaging application at the beginning of their debut, for this reason, a chatbot was introduced into the application to facilitate the transaction conversion process.

Woobiz also runs a similar business model, by emphasizing the aspects of empowering women in the regions. In addition, there are several other applications such as Jamanow, BorongBareng, Taptalk.io, and Super which also make it easier for resellers to restock.

The McKinsey report states, social commerce is expected to grow into a business sector valued at up to $25 billion by 2022. RateS seeks to maximize this potential. From the internal data collection, their service coverage has reached 400 cities/regencies by 2020.

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Original article is in Indonesian, translated by Kristin Siagian

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Discovering the Prospect of Securities Crowdfunding for Startup Ecosystem

OJK’s act to expand alternative capitals for SMEs from equity crowdfunding (ECF) to securities crowdfunding (SCF) should be appreciated as the previous regulation had many cracks that did not accommodate SMEs, which were most are yet to be a form of limited liability companies.

The detailed regulations are contained in POJK 57/2020 concerning Securities Offerings through Information Technology-Based Crowdfunding Services, replacing POJK 37/2018 which has a limited concern to stock-based crowdfunding services and Islamic stocks.

The regulation, which contains 13 chapters and 92 articles, contains the detail of licensing, business activities, obligations and prohibitions, reporting, practice of securities offering and trading, also sanctions.

The extension does not necessarily eliminate the presence of the ECF. Chairman of the Indonesian Association of Crowdfunding Services (ALUDI) Reza Avesena, who is also the Co-Founder and CEO of Santara, emphasized that the ECF function still exists and remains an alternative that can be of interest to publishers and investors.

“With SCF, organizers can issue securities not only based on equity but also based on debt or sharia-compliant stocks (will be referred to as sukuk). It is spelled on Article 91,” he explained to DailySocial.

Avesena explained that the issuance of sukuk has now adopted what is applied by the capital market regulator. The requirements used by the IDX for issuing sukuk, such as the role of DPS (Sharia Supervisory Board) or ASPM (Capital Market Sharia Expert) recommended by DSN MUI, the role of sharia custodian banks, and the role of KSEI as custodian.

Furthermore in this SCF service contains several important points:

A. Bidding duration: 12 months (one time or more)
B. Securities offered: Equity securities, debt securities, and sukuk
C. Bidding value: Up to IDR10 billion
D. Offer period (each offer): 45 days
E. Offer is null and void: If the minimum fund is yet to fulfill, the offer is null and void.
F. Equity Securities: It is prohibited to use more than 1 provider
G. EBUS (Debt Securities and/or Sukuk): It is prohibited to raise new funds through the LUD before the Issuer fulfills its obligations to investors (except for EBUS progressive offers)
H. Cancellation offer: Issuers can cancel offers of securities before the end of the offering period by paying a penalty to the operator

CORE Indonesia’s economist, Yusuf Rendy Manilet said that the presence of SCF is a positive step for the domestic capital market because it can increase the amount of raising funds from the capital market. In addition, SCF has deepened the variety of instruments in the capital market as there are many financing instruments that have not been fully explored.

“This is a good thing, especially for the small and medium enterprise sector which is often hampered by capital issues. The impact will certainly be in line with the government’s efforts to deepen ownership of domestic investors,” he explained as quoted from Bisnis.com.

Bank Permata’s VP Economist, Josua Pardede agreed on this. He said the emerging SCF will have a positive impact on the capital market in line with the increasing demand for shares from domestic investors. This is clearly visible as the increasingly limited impact of foreign investors’ entry and exit on stock movements.

“SCF will deepen the stock market and encourage the empowerment and corporatization of SMEs,” he said.

Sumber: Depositphotos.com — Source: Depositphotos.com

The story behind ECF to SCF

Amvesindo’s Chairman, Edward Chamdani said that OJK’s reason for issuing POJK 37/2018 was due to the regulator’s decision to issue an ECF that is yet to fully understand the coverage. After issuing the POJK, the association provides insights from venture capital, for example, mandatory convertibles (mandatory convertible bonds) count as equity. Meanwhile, in the capital market, it is still considered a loan as long as it’s not the due date.

The concept differences occur as the regulations in the capital market are stiffer in regards to the regulations at the Ministry of Law and Human Rights. Also, after the issuance of POJK 37, there’s still a crack which finally completed by OJK through POJK 57. He saw OJK’s concern to the insights from Amvesindo that securities such as bonds or KIK participation units could be secured.

“Instead of making a circular, OJK finally made POJK 57, which is embedded with POJK 37. Therefore, securities instruments with a more open characteristic can be crowdfunded, not just equity,” he said as contacted by DailySocial.

He continued, the thing about SCF is it can be a new breakthrough for the startup ecosystem because it can be an attractive medium for angel investors, VCs, or accelerators expecting to collaborate with SCF organizers and fund SMEs.

There are many possibilities, for example, creating a joint venture company that functions as a pool of funds with a more open characteristic to invest in companies that are included in the SCF platform. Next, to be empowered by the accelerator players for a class upgrade and enter the accelerator board on the IDX. It could also be an angel investor or VC who directly injects funds for these SMEs.

Venture capital that does not adhere to a growth mindset can also invest. The SME businesses that enter the SCF platform are curated, not haphazard, and have stronger business fundamentals than most technology startups oriented towards “burn money” strategies.

Growth mindset-oriented venture capital companies also present. The misconception that VC is only interested in entering technology startups can also be suppressed as they start to look into many sectors. These possibilities can occur because there is a wider range of investors involved.

In terms of regulations, OJK is being more strict for SCF players than p2p lending, which still finds fraudulent investment because some players are foreign and have no representative offices in Indonesia. In fact, OJK does not enforce any provisions for registered status, the operator must have a new license to operate.

The requirements to obtain a license are very serious, not limited to understanding the business model, but must be ISO 27001 and audited by a committee that is a member of the IDX. “Because this is a mini stock exchange for private investors, we have to be strict from the start.”

Upgrade to SCF

OJK recorded issuing four operating licenses to four companies until the end of last year. They are Santara, Bizhare, Crowddana, and LandX. In total, these four companies have raised IDR185 billion in funds.

Meanwhile, OJK has noted that there are 16 prospective operators still in the ECF licensing process and three prospective organizers in the SCF licensing process. Two of the three referred to are Santara and Bizhare. “It’s in the final stage, hopefully, it can be issued [permit] this February,” Avesena said.

Santara has prepared a number of plans, for instance, for the issuance of sukuk, it has obtained a recommendation regarding the TAS (Sharia Expert Team) from the MUI DSN. However, even if the permit has been issued, the company will not immediately focus on SCF this year as it has first chosen to focus on issuing ECF.

“Because the ECF business model is very mature in our internal. However, that does not mean we will not issue sukuk, it is more necessary to educate the market and the audience first.”

Bizhare’s Founder and CEO, Heinrich Vincent said to DailySocial that the company chose to transform into SCF, not a pivot, in order to develop a pre-existing business model.

“Indeed, it is intended to make it easier for the community, especially SME businesses, to obtain capital with a more diverse choice of schemes. To be able to support Indonesia’s economic development and open up wider employment opportunities.”

He continued, Bizhare’s SME business that received funding through the ECF scheme will continue to run and the company alone delivers innovations for the category in this service product by releasing Secondary Market services which will be released in early February 2021.

This service is a strategy to increase the liquidity of the issuer’s shares, as well as an exit strategy for investors. In an official statement today (3/2), Heinrich explained the benefits of the Secondary Market for SME publishers, to buy back their shares in the Secondary Market, if there are investors who want to sell their shares.

This way, a mature financial service system will be democratized, such as the capital market, which was initially only accessible to the upper-middle class, now accessible to SMEs throughout Indonesia. Investors can conduct transactions (bidding) and offer (shares) safely and conveniently.

“Bizhare Secondary Market is available for publishers operating at least a year, have been registered with KSEI, and/or are in accordance with the resolution of the GMS of Issuers. The Secondary Market will be opened every 6 months with the Secondary Market opening for 10 working days,” Vincent said.

Vincent is optimistic that SCF will make it easier for SMEs to choose the type of funding that suits their preferences, whether it’s in stocks, bonds or sukuk. In terms of requirements, the issuers are not only for limited liability companies, but also for cooperatives, CVs, and so on.

“We’ll continue to provide stock offerings for an increasingly attractive and diverse array of SME businesses. Currently, Bizhare is opening funding for various businesses that can be invested starting from IDR 50,000 per share. We are optimistic that there will be many businesses of Indonesian youth to grow rapidly thanks to our services as SCF, therefore, the development of Indonesian economy will be even more extraordinary.”

Bizhare is targeting more than 200-300 UKM to open funding through Bizhare this year. In terms of investor, the total investment value is expected to grow between 5-10 times. This target is to achieve with company innovation not only through expanding services to SCF but also additional types of businesses besides SMEs and franchisees, including technology startups.

“In terms of product, we will soon launch a new feature, it’s the business profile for prospective publishers can easily apply for funding and list their profile on Bizhare. In addition, the application for Android and iOS are targeted to launch this year.”

Vincent continued, “There are various strategic partnerships with various parties to be announced in the near future. In terms of funding, we’re to start discussing with various investors and VCs to join Series A funding by the end of 2021. ”

Massive education is necessary

The SCF market potential can be measured from the 60 million estimated number of MSMEs. In order to pursue this, ALUDI has a lot of homework to do. Industry optimism needs to be followed by massive education from all stakeholders in order to create a healthy ecosystem as the opportunities will get wider.

Avesena said financial literacy, integrity, legality, and understanding of the capital market have to be improved from an SME business perspective. Meanwhile, as the investors, literacy in understanding investment risk should be enhanced. It is considering each investment instrument has a different level of risk and level of understanding.

Another thing that needs to be upgraded is a public trust and lack of talent in the financial industry. Chamdani emphasized that in terms of educating investors, they should not be mistaken because this is a new investment instrument, such as stocks but not as liquid as stocks and the issuing company is relatively new.

“However, this is attractive because it contributes to SMEs, they have a fundraising route where banks or other financial institutions cannot be involved. That is an opportunity.”

He expects that if this instrument becomes more attractive to SMEs, the costs for listing securities in KSEI will be cheaper. Moreover, KSEI is currently promoting scriptless securities registration with ongoing system updates.

“KSEI’s potential could be a scriptless pattern for private companies to become a breakthrough, but the cost issue could be a burden on the platform, this becomes a concern.”

In terms of the perpetrators, Vincent said that the company prepares various programs every week to provide information about SCF online for investors. “We are actively working with the seller community, starting from the SME business community, seller marketplaces, and many others to educate business people in terms of strategies to develop their business through Bizhare funding,” he concluded.

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Original article is in Indonesian, translated by Kristin Siagian
Header: Depositphotos.com

Member.id Announces 15,4 Billion Rupiah Worth of Series A Funding

The Member.id loyalty platform has announced series A funding worth of $1.1 million or equivalent to 15.4 billion Rupiah. This round was led by East Ventures and Traveloka. Fresh funds will be focused on strengthening content capabilities on the platform, in line with their mission to create a “creator economy”.

One of the launched initiatives is TS Media as a new content production division in the company. This unit allows brand owners to collaborate with the rapidly growing creator ecosystem in Indonesia through the support of Member.id’s technology and expertise.

Later, Member.id will focus on providing strategic consulting, data analysis, and technology solutions to encourage retention and increase customer acquisition. Meanwhile, TS Media will focus on content creation to increase awareness and activation to drive customer acquisition.

Along with the funding, they also launched “Travel Secret”, a travel content platform pioneered by the actress Luna Maya and Marianne Rumantir (Co-Founder & CEO of Member.id). Luna also joined the company as a Managing Partner.

The presence of Traveloka as an investor is expected to provide added value for the business, especially for connecting Member.id with merchant networks.

“The pandemic has triggered a change in consumer behavior. They spend more time viewing content on social media. By creating content geared towards domestic tourism [via Travel Secret], we can become a significant force in driving additional demand for Traveloka,” Member.id’s Co-Founder & CSO Robert Tedja said.

“The unique strategy driven by Member.id content can open up new opportunities for Traveloka users and our travel and lifestyle business partners,” Traveloka’s Group President, Caesar Indra added.

Apart from Member.id, Traveloka has also invested in three other startups, including KiotViet, PouchNATION, and PasarPolis.

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Original article is in Indonesian, translated by Kristin Siagian