Indonesia likely to see next unicorn emerge from education sector

Photo: REUTERS/Garry Lotulung

Indonesia is likely to have more than five startups worth at least $1 billion each by 2019, with healthcare and education the most promising sectors to spawn new unicorns in Southeast Asia’s biggest economy, the communications minister told Reuters.

Driven by a youthful population of more than 250 million people owning at least 100 million smartphones, Indonesia has seen a rapid growth in the number of startups trying to capitalize on this potential in a growing economy.

The country currently has four unicorns – companies that have reached $1 billion in valuation without tapping the stock markets – including ride-hailing company Go-Jek, travel site Traveloka, and market places Bukalapak and Tokopedia.

“In ASEAN (the Association of Southeast Asian Nations) we have seven unicorns and, out of seven, four are coming from Indonesia,” said Minister of Communication and Information Rudiantara, noting that even one of the unicorns in the region outside Indonesia derived most of its revenue from the country.

“I believe that we’ll have more than five unicorns until 2019,” Rudiantara, who uses one name, said in an interview.

Investors in Go-Jek include Tencent Holdings, with Alphabet Inc’s Google joining the latest fundraising. Tokopedia has backing from Alibaba and SoftBank Group, while Traveloka’s backers include Expedia and JD.com. Bukalapak investors include Singapore’s GREE Ventures.

The minister said that a unicorn was likely to come from the education sector.

“If we see the numbers, I project that has to come from the education (sector),” he said.

Under Indonesia’s constitution, the government has to spend a fifth of its annual budget on education, so even excluding private spending an app or startup only needed to get a small percentage of this “huge” potential, he said.

Indonesia’s state budget for education was 400 trillion rupiah ($29.50 billion) in 2017.

The minister said the biggest local app for education currently was Ruanguru.

The other most promising sector to develop a unicorn is healthcare, which has a state budget of more than 100 trillion rupiah, he said.

He noted the development of startups like HaloDoc offering online medical consultation, while others include Alodokter.

On funding, the minister said that he wanted to help make it easier for unicorns to apply for initial public offerings in Indonesia. Local regulations prevent listings before companies have made a profit for a number of years.

“If necessary, I will go to the OJK (financial regulator) to solve this issue,” he said, adding the government should no longer be just a regulator.

“It’s an old model. The government has to be the facilitator,” said Rudiantara.

Reuters

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.