Indonesia has historically struggled to compete on the world stage, even with some of its close neighbors, in innovation, entrepreneurship, and start-up culture.
That legacy may be about to change. Presidential Decree No. 2 Year 2022 mentioned entrepreneurship as a key component of Indonesia’s economic growth blueprint, as outlined in the National Mid Term Development Plan 2020-2024.
We welcome this call to action as an opportunity to take stock of Indonesian impact investment — who the key players are, where they stand, how their Indonesian heritage plays into their current and future plans, and what can be done to encourage impact investment and social entrepreneurship in Indonesia; as INTRA show in our impact directory.
To that end, we interviewed two star-quality, Indonesian-born entrepreneurs whose products create impact, and are funded with impact as the investment thesis. These two test cases paint a robust picture of talented young people who left Indonesia to make an impact on the world stage. They haven’t forgotten their country of birth … but more must be done to entice their energy (and their capital) back home.
Ferlin Vermeer Yoswara — Co-Founder of Ring Theory
“I feel very passionate in making 3D products and always dreamed to [becoming] an entrepreneur since I was a kid.”
Ring Theory co-founder Ferlin Vermeer Yoswara has been a creative force from an early age, becoming a professional artist at the age of 4.
Her work has been collected by the Royal Family of The Netherlands, the National Museum of China, the National Museum of Norway, and numerous other museums and dignitaries. She is also the recipient of over 155 national art awards and served as an art ambassador for UNICEF, UNESCO, and Louis Vuitton.
Yoswara studied jewelry in university and put her love for 3D objects into practice by founding her own jewelry brand — only to discover a competitive “red ocean” environment with few opportunities for a talented newcomer to make a big impact.
She decided to think outside the box and look for a niche that married jewelry with technology and innovation — perhaps fertile ground for her to blaze a new trail. In doing so, she discovered a new passion — wearable technology.
The obvious use case for her was something familiar to many office-dwellers — the digital access card.
“I had this ugly plastic card to open the door of my office that was always hanging on my neck,” Yoswara said. “I hate it, that was the very first time I thought I need to change it [and] become a smart wearable!”
Confident in her acumen as a design and marketing partner, Yoswara only needed technology partners and found MIT graduates Edward Tiong and Olivia Seow. Together, they co-founded Ring Theory, a company dedicated to developing beautiful and functional “smart rings” capable of making payments, acting as security credentials, and other secure wearable functions.
Ring Theory and Social Entrepreneurship
Ring Theory received its early funding from Singapore as part of an Environmental Impact funding initiative, thanks to the application for Ring Theory in public transportation.
Ring Theory currently has no impact investors on board, but Yoswara expressed eagerness to change that. “They are thinking further than just making money,” she said, “and by increasing the impact, we include more stakeholders in our company that will benefit our company in the long term.”
Funding Sources: Crowdfunding | Singapore Government
Ring Theory had its first fundraise on Kickstarter, and within six months received funding from the government of Singapore. They collaborated with MIT 3D labs thanks to Tiong’s and Seow’s connections, brought their first line of rings to market with very little capital outlay, and became profitable very early on.
Location: Boston, Massachusetts, US | Singapore | Rotterdam, Netherlands
Ring Theory selected Boston, Massachusetts (US), Singapore, and Rotterdam, Netherlands for their bases of operations.
Boston was selected due to its proximity to MIT and by virtue of Ring Theory’s first major client being the Massachusetts Bay Transit Authority (MBTA).
Singapore was selected due to the patronage of the government and a collaboration effort with the Singapore University of Technology and Design (SUTD).
Rotterdam was selected due to a start-up permit received from the Dutch government in 2017 to expand Ring Theory into the European market. Yoswara currently resides in Rotterdam.
Views on Indonesian Social Entrepreneurship Climate
Yoswara is eager to expand Ring Theory into the country of her birth.
“Indonesia has a big potential market for Ring Theory,” Yoswara said. “If we can find the right local partner, we would like to expand to Indonesia.”
“It’s great because Indonesia has a big population,” she said. “Social entrepreneurship can help the community and bring Indonesian people forward. The Indonesian young generation and start-ups are very creative and have big potential to make [an] impact in Indonesia and abroad.”
Driando Ahnan-Winarno — Co-Founder of Better Nature
When he entered an international biotech competition at the University of Cambridge in 2018, food scientist/entrepreneur/artist Driando Ahnan-Winarno had no inkling that he was going to win.
He was competing against ideas for new vaccines. His idea was to expand the use of tempeh, a traditional Indonesian plant-based meat substitute.
“I was an underdog,” Ahnan-Winarno said, “bringing forward my food science background amongst other ‘hardcore’ biotechnologists.”
The Bogor native was shocked when he beat a hundred competitors, including a worldwide complement of students from the likes of Harvard, MIT, Oxford, and Cambridge to win First Place.
Abandoning his PhD studies, Ahnan-Winarno capitalized on the reputation and prestige of the win to partner with business development specialist Chris Kong to co-found Better Nature, an innovative producer of tempeh-based food products.
“At that time, I was in my third year of my PhD study and was extremely busy working in the lab,” he said, “but the opportunity of creating the business felt like a life calling, especially to me, who has been a believer in the mission of giving more people access to affordable, nutritious, and sustainable food.”
Ahnan-Winarno loves the Japanese concept of ikigai — an approach to happiness and fulfillment that unifies, into one pursuit, an individual’s 1) passion, 2) talent, 3) income, and 4) impact.
Prior to founding Better Nature, he had founded the nonprofit Tempe Movement, which had fulfilled three of the four criteria of ikigai. Better Nature was a chance to add in the missing piece — income.
Better Nature and Social Entrepreneurship
Social entrepreneurship has been a part of the Better Nature ethos since its inception.
“Being in the plant-based space gave us access to many mission-driven vegan investors in particular,” Ahnan-Winarno said. “We love to work with them because we share common values and aspirations. We are always excited by the possibility of contributing to the betterment of the world, especially in the aspects of sustainability, food accessibility, public health, and ethics.”
Ahnan-Winarno sees this as a win-win proposition — a shared mission, with a path to profitability as well.
“The opposite is also true,” he said. “Sometimes I felt turned off if the investors did not talk enough about impact or gave a super money-oriented first impression.”
“In short, we believe that as much as investors should be picky and careful to choose whom to invest, we as start-ups should be as well.”
“We started with ‘three F’s,’” Ahnan-Winarno said of Better Nature’s early fundraising, “friends, family, and fools. Just kidding, there is no fool, only believers.”
This got them through the R&D process to secure the core technology for medium-term and long-term projects. To develop their brand and short-term projects to gain traction (MVP, sales, revenue) required pre-seed fundraising.
Kong’s previous experience working with venture capitalists proved to be a crucial inroad to angel investors, most of them from the plant-based food space.
“Since the space has been booming, we really feel the benefit of being in the same boat with many other mission-driven investors,” Ahnan-Winarno said.
Better Nature recently raised about $2 million in seed funding through a crowdfunding campaign in order to enhance their branding, bring new products to the market, further R&D, and attain new major sales channels.
They have also looked into UK government funding.
“The government part has been interesting,” Ahnan-Winarno said, “because due to the pandemic, we have enjoyed the benefits of some government incentives to revive the economy e.g. better-rate loans or tax-waiving policies.”
Location: London, UK
Better Nature is based in London, UK.
“The UK came naturally to us,” Ahnan-Winarno said. “First, we won the competition in the UK, where we got the validation of our idea.”
“Second, my partner Chris has been living in the UK and knows the market very well.”
“Third, tempeh can serve many people who are craving for plant-based foods that are naturally nutritious, given the high and increasing vegan, vegetarian, and flexitarian populations in the UK.”
“I personally love bringing tempeh to the UK because London,” Ahnan-Winarno said, “in particular, has a great branding. It aligns with my mission of making tempeh cool. I think if tempeh is cool in London, tempeh can be made cool easier in other parts of the world.”
Views on Indonesian Social Entrepreneurship Climate
“We aspire to cater the Indonesia market eventually,” Ahnan-Winarno said of his homeland, “although our current main focus would still be the UK and EU markets.”
According to him, entering Indonesia would require a different approach, as well as some time to produce the best possible products and supply chain. But Ahnan-Winarno is excited about the possibilities of expanding Better Nature to the country of his birth.
“Indonesia has an extraordinary spirit of social entrepreneurship that I did not see anywhere else,” Ahnan-Winarno said. “From my experience living in the US and co-managing my start-up in Europe, Indonesia fundamentally has a very strong ‘give back’ culture.”
Compared to the “American Dream” of personal advancement, Ahnan-Winarno resonates with an “Indonesian Dream” of giving back to the country and helping those most in need. He also sees social entrepreneurship springing up in Indonesia at the grassroots level — local artists, employing the unemployed and underprivileged, donating part of the profits to charities and communities.”
He acknowledges, though, that Indonesia must catch up to the West in terms of its start-up and investment ecosystem. But doing so will enable local entrepreneurs and investors to capitalize on what Indonesia does best — collaboration.
“Perhaps this is a manifestation of the gotong royong philosophy during this startup era,” Ahnan-Winarno said. “I always missed this social entrepreneurship spirit of Indonesia when I lived abroad and I hope I can join the wagon. I believe that we have the responsibility to help the community or nation we know the best.”
Insights From These Case Studies
Opportunities for Indonesian Social Entrepreneurship
- Indonesian-born social entrepreneurs compete at the highest level. We see native Indonesian social entrepreneurs attending the best universities, winning contests, forming high-level global partnerships, and establishing global enterprises of significant impact.
- Indonesia is an attractive market. Indonesia has a large population — the fourth largest in the world — an increasingly free economy, and significant natural resources and domestic capacity. This makes it an attractive market for new and expanding enterprises.
- Indonesian culture is a natural fit for social entrepreneurship. Indonesians as a whole take pride in community, cooperation, and giving back — all hallmarks of robust social entrepreneurship.
- The Indonesian Government is taking steps in the right direction. Presidential Decree No. 2 is a step in the right direction, and hopefully a sign of things to come.
Challenges for Indonesian Social Entrepreneurship
- Indonesia needs to lay better groundwork and create an ecosystem where social entrepreneurs can thrive. Indonesia has the talent; they just need a system to work within that values social entrepreneurship and rewards excellence.
- Local and governmental support for social entrepreneurship has a long way to go. While Presidential Decree No. 2 makes it easier, the Indonesian government still makes it relatively difficult for capital allocators to invest in Indonesian social entrepreneurship. More steps must be taken before Indonesia can compete with the likes of Singapore, the UK, the EU, and the US.
Indonesia has the makings of a global force in social entrepreneurship — the talent, the culture, the resources, and the eyes of the industry.
By investing in its social entrepreneurship policy and ecosystem, the Indonesian government can entice its native sons and daughters to invest in the homeland — inviting not only a welcome influx of capital, but also a great awakening of social cohesion and national purpose.