Indonesia’s state telco considers selling its $830M venture investment

Indonesia’s largest state-owned telecom conglomerate is considering a major shake-up of its venture capital business, as PT Telkom Indonesia’s subsidiary TelkomMetra weighs a potential sale of MDI Ventures, according to people familiar with the matter. The sale process is in preliminary stages, insiders told CNBC, with TelkomMetra hiring Jefferies as its adviser, although no final decision has been made. TelkomMetra, in a letter sent to at least one portfolio company earlier this month, said it was "assessing various alternative strategic corporate actions" for MDI Ventures, including a sale, and sought stakeholder input by July 17.

MDI Ventures, with $830 million in total committed assets under management, is a leading corporate venture capital firm in Indonesia. Its funds also manage capital from institutional investors in South Korea, Singapore, and Norway, according to PitchBook data. But Indonesia’s tech sector has been hit by a prolonged funding slump. According to Tracxn, the capital raised by Indonesian tech companies is projected to fall to $213 million in 2025, a 38% decline from the previous year and 85% below the 2023 level.

The prospective disposal comes as MDI faces heightened scrutiny after a Jakarta court in June found four former executives from MDI Ventures and BRI Ventures guilty of corruption in connection with a joint $25 million investment in the now-defunct agritech startup TaniHub Group. Prosecutors claimed the defendants failed to properly validate data from the startup and that their mismanagement of the fund led to losses for state finances. All four were sentenced to prison terms ranging from two to five years. Lawyers for these executives argued that all established governance procedures and due diligence had been followed, stressing the inherent risk in venture investing, where startups often lack strong operating histories or audited records. At least three defendants are considering appeals.

The TaniHub case has become a flashpoint for Indonesia’s stringent anti-corruption laws. Under the country’s "state loss" doctrine, investments made by state-controlled companies are treated as deployments of public money. Prosecutors can pursue criminal charges if an investment fails and produces a loss to state finances, exposing firm executives to severe legal liabilities even when decisions align with industry norms. TaniHub, launched in 2016, sought to link Indonesian farmers with buyers and offer agricultural credit but was eventually liquidated in 2024 after mounting non-performing loans.

The crackdown on state-linked executives has not been limited to venture capital. In recent months, high-profile figures including Nadiem Makarim, Gojek’s co-founder and former education minister, and Tom Lembong, a former trade minister, have been convicted and sentenced to prison for alleged abuses of authority that led to purported state losses.

Danantara Indonesia, the country’s sovereign wealth fund, reportedly ordered Telkom Indonesia to cut 10 subsidiaries by the end of June, amid efforts to rationalize sprawling state company portfolios, though CNBC could not independently confirm this order.

Bert Hofman, a visiting senior fellow at CSIS Indonesia who helped draft the nation’s anti-corruption laws, warned that criminalizing state losses risks deterring both investor interest and talent from state-linked institutions if tough enforcement threatens executives over commercial risk-taking. The ongoing uncertainty has cast a shadow over Indonesia’s state-backed venture capital sector, with the fate of MDI Ventures now under close watch as TelkomMetra weighs its options.