womidea.com – AC Ventures Founding Partner Pandu Sjahrir reminded startups in the technology sector to be more serious in prioritizing good corporate governance (GCG). If governance is not well optimized, it will affect the valuation of the company itself.
“I’m happy to see that the fundamentals of big technology companies are back to basics, back to fundamentals. That’s better than last year. So there’s no more ‘burn money’ language because investors want to maintain business fundamentals, cash flow and corporate governance. which is good,” Pandu saidquoted by Antara, Wednesday (30/11).
Pandu said that many large companies, including technology companies, have gone bankrupt due to bad corporate governance. Investors like himself have repeatedly reminded technology companies, both large and start-up, to have good financial reports and internal audits.
“Company valuations can drop if good governance is bad. Public technology companies globally can experience this. There are, really, those who experience a 50-70 percent decline in valuation,” he added.
The fundamental condition of the Indonesian economy, continued Pandu, is still positive and it is hoped that next year it will not be hit by a recession. A number of technology companies in Indonesia are also still able to achieve 50 percent revenue growth even though they do not carry out ‘burning money’.
“In the past, there were technology companies that achieved high growth after ‘burning money’. Now and in the future, we hope that this will not be the case,” said Pandu, who also serves as General Chair of the Indonesian Fintech Association (Aftech) Daily Board of Directors for the 2021-2025 period.
According to him, the potential for the startup ecosystem in Indonesia is still large. AC Ventures is preparing up to US$250 million in capital to invest in early stage companies. Meanwhile, Indies Capital, where Pandu also serves as Managing Partner, has prepared around US$200 million for the late stage.
However, Pandu emphasized that future investment needs to really pay attention to environmental, social and governance issues. Because the studies conducted show that the application of ESG has predominantly a positive impact on the return on equity.
“I like the segments that will be invested in, such as e-commerce, fintech, e-commerce, logistics, but indeed there must be an ESG element because it is very important to enter a public company, especially if it is already late stage,” said Pandu. [azz]