Open Labs founder and CEO Jeffrey Yuwono told reporters on Thursday that his firm was seeking local brands that had Rp 3 billion in annual revenue, positive margins, rapid growth and were among the best in their category.

The firm had already invested in health care, home appliances, fashion and e-commerce businesses and was looking to acquire more companies.

“If they are too small, they do not suit us. But that figure [Rp 3 billion in annual revenue] is a minimum, because we have met brands with sales nearing Rp 100 billion a year and up,” Jeffrey said during a press conference.

Open Labs would offer to buy 51 percent or 100 percent of these businesses. In the case of a 51 percent acquisition, the founder could stay as CEO and run the operations on a daily basis, while Open Labs would act as commissioners for that company and do the high-level planning.

“We do not sell anything. Therefore, we need the 51 percent minimum ownership to consolidate our finances. Each partner’s sales and net profit are also Open Labs’ sales and net profit,” Jeffrey said.

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In return, companies would benefit from a wide range of expertise Open Lab offered in 16 areas, including digital marketing, branding, logistics and cross-border services, to scale up their operations.

“For one small business, recruiting the best team is very expensive, but it's possible when done collectively. This is why the brand aggregator concept makes sense,” Jeffrey said.

With this expertise in hand, he believed, founders could better manage their operations as their business grew larger in volume and scope.

Open Labs claims to be a better option than other investors, arguing that brand aggregators would be willing to invest in micro, small and medium enterprises (MSMEs) while private equity (PE) investors would only finance large companies.

Companies were also required to show only stable growth and profitability, rather than exponential growth and unicorn status – companies with over $1 million valuation – as demanded by some venture capital (VC) investors.

However, Jeffrey’s Rp 3 billion minimum annual revenue criteria excludes many MSMEs in Indonesia, where small businesses are defined as those with annual revenue below Rp 2.5 billion, while those above that threshold are categorized as medium or large businesses.

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On top of that, founders could receive a “yes or no” decision within a week regarding their proposal, and it would only take around two months to seal the agreement, whereas VCs and PEs would take roughly six to nine months, with no guarantee that an agreement would be reached, he said.

“This is the fastest investment time in ASEAN. We don't want to waste the founder’s time. The founder has nothing to lose talking to us,” Jeffrey said.

So far, Open Labs did not have a specific appetite as to which sector to invest in, nor a specific target in these acquisitions, he added, arguing that the firm preferred to focus on quality and spending money wisely.