There were more than 130 deals involving startups in Indonesia that raised at least $3.4 billion in 2019 – making the country the second-most robust startup nation in Southeast Asia, according to deal data compiled by DealStreetAsia.
Only Singapore, which typically attracts entrepreneurs from all over the world to set up shop in the city-state, had more startups raise more money during 2019. DealStreetAsia recorded $4.2 billion worth of private equity and venture capital deals in Singapore last year.
Not surprisingly, the Indonesian companies that raised the most funds during 2019 were the unicorns.
Leading the charge was Gojek, the ride-hailing service turned e-commerce platform, which raised $1.6 billion during the year, beginning with about $1 billion from Tencent and other investors.
Online travel service Traveloka raised $420 million during the year. US-listed mobile payments app KinerjaPay raised $200 million from Wahana Group, and Warburg Pincus-backed mall developer NWP Retail secured $200 million in funding. Edtech platform Ruangguru secured $150 million during the year, notably from private equity firm General Atlantic.
Market watchers are expecting a tougher fundraising environment in 2020 at a time when more startups and vehicles are set to hit the market for capital.
Nevertheless, Indonesia’s consumption-driven internet economy should continue to provide opportunities for growth. It is the fastest-growing in Southeast Asia, at an average growth rate of 49 per cent a year since 2015. Half of Southeast Asia’s 16 largest cities are in Indonesia. Apart from the capital Jakarta, the fast-growing urban centres include Medan, Surabaya, Bandung, Semarang, Depok, Tangerang and Bekasi.
And as the Google-Temasek Holdings-Bain & Co report noted last year, $2 out of every $3 raised in Indonesia went to e-commerce or ride-hailing business. It is forecast to expand from a GMV of $40 billion in 2019 to hit $130 billion by 2025. That is far outpacing the regional average growth rate of about 33 per cent a year. Incidentally, Indonesia is where the four SE Asian e-commerce unicorns – Bukalapak, Lazada, Shopee and Tokopedia – compete for a slice of the market opportunity.
The boom in consumer-focused tech platforms in Indonesia is also transforming the country’s economy, which largely saw investments pouring into traditional sectors of energy, natural resources, and agriculture.