With Go-Jek attracting $550 million in funding last week, this has further enforced the notion that Indonesian startups are fertile ground – thanks to its growing population of young internet users. This leads many market watchers to predict several existing startups that are catering to the country’s on-demand economy could also be on their way to becoming unicorns.
For investors, the on-demand sector is quite enticing; especially in a country whose 250 million population is on a path of becoming increasingly urbanized, connected, and technology savvy.
Silicon Valley’s Fenox Venture Capital, one of the most actives in the region, is of the view that Indonesia’s on-demand services sector offers much room for expansion. The venture firm has been investing and mentoring some of the on-demand platforms such as Belazee and AhliJasa.
“Go-Jek is the king of on-demand startups now. But I see there are some others that are very promising as well,” Fenox Venture Capital’s investment team Nazier Ariffin told DEALSTREETASIA. He said the firm was set to announce some locked investments in early stages startups in the near future. However, he declined to reveal the values and identities of the startup.
“It maybe concluded around next month,” he said.
Under Fenox’s GNB Accelerator – a joint initiative with Japanese IT services provider Infocom Corporation – there are six Indonesian startups being assisted to grow. Four of them are in the on-demand sector, and these include Ahlijasa, XWORK, Klikdaily, and HipCar.
“We have seen some significant changes from them being under the guidance of our partners from the US and Japan,” Ariffin added.
In a much larger scale, Fenox VC believes that Indonesian startups, and those in the Southeast Asia region, are often still underrated by US investors. They have much potential to invigorate the economy, but lacks of support from Silicon Valley, he said.
“Most of investors believe that the US market is already big enough. We want to educate them, bring light to the startups in the eastern part of the world so that investors can perceive the potentials of these companies to level up – locally and internationally – and become part of their portfolio,” added Ariffin.
According to data furnished from Association of Internet Service Providers in Indonesia, the country has about 100 million internet users, which translates to just about 40% penetration rate, while its smartphone users are around 65 million, and research firm eMarketer, has estimated that this will jump to 92 million by 2019.
Go-Jek apart, Indonesia has seen several startups that are believed to command unicorn status. Traveloka, the country’s top flights booking site, is reportedly valued at $1 billion with notable investors such as Global Founders Capital (GFC) and East Ventures backing it. Traveloka was founded in 2012, and in 2015 had booked 3.7 million desktop visitors with annual booking value of $1 billion. E-commerce major Tokopedia, which rased $147 million in funding earlier this year, is reported to have done so at a valuation of over $1 billion. Tokopedia was East Ventures’ first investment and this deal was Sequoia Capital’s first in the region.
In an unrelated development, YesBoss, Indonesia’s SMS-based personal assistant startup that bagged an undisclosed amount of seed funding from 500 Startups, Convergence Ventures, and IMJ Investment Partners last year, is learnt to be in the process of securing a series A funding from foreign and local investors.
Early this year, Fenox announced the Startup World Cup – the first global startup conference and competition that involves 15 regional events and a $1 million grand prize in investment.
Entry is open to all startups from all over the world. Shortlisted applicants will pitch at any one of the 15 regional events the firm plans to organise, and top 16 startups will compete for the grand prize in San Francisco on March 24th, 2017.
From Southeast Asia alone, about 1,000 startups are expected to apply. Approximately 80 per cent of those are from Indonesia.