Investors warm up to big-ticket early-stage deals in Indonesian startups

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Big-ticket Series A deals, worth more than $15 million, are becoming more frequent in Indonesia as investors loosen their purse strings to meet the growing demand for capital from the country’s early-stage startups.

In January this year, four Indonesian startups — fintech firms Ajaib, Bibit, and Alami, and B2B e-commerce startup Ula — closed Series A rounds exceeding $15 million each in ticket size; the same number as in the entire 2020.

In contrast, just three startups in the country secured $15 million-plus Series A rounds in 2018-19, show data compiled by DealStreetAsia.

Expand Table

YearCompanyHeadquartersSectorInvestorsFunding size ($ mln)
2021AjaibIndonesiaFintechHorizon Ventures, Alpha JWC, Softbank Ventures Asia,
Insignia Ventures, Y Combinator
25
UlaIndonesiaB2B ecommerceSequoia Capital India, Quona Capital, Lightspeed India Partners,
B Capital Group
20
BibitIndonesiaFintechSequoia Capital India, East Ventures, EV Growth, AC Ventures,
500 Startups
30
Alami IndonesiaFintech AC Ventures, Golden Gate Ventures, Quona Capital20
iStoxSingaporeFintechJIC Venture Growth Investments, Development Bank of Japan,
Juroku Bank, Mobile Internet Capital,
Tokai Tokyo Financial Holdings, Hanwha Asset Management
50
2020GrabWheelsSingaporeelectric vehiclesKymco30
Zenius EducationIndonesiaedtechNorthstar Group, Kinesys Group, Beenext20
Socar MalaysiaMalaysiatransportationKH Energy, Eugene Private Equity18
Kargo TechnologiesIndonesialogisticsTenaya Capital; Sequoia Capital; Intudo Ventures;
Coca-Cola Amatil; Agaeti Convergence Ventures;
ATM Capital; Alter Global; Mirae Asset Venture Investment
31
GudangAdaIndonesiaB2B marketplaceSequoia India; Alpha JWC25.4
ShipperIndonesialogisticsProsus Ventures; Lightspeed; Floodgate; Y Combinator;
Insignia Ventures; AC Ventures
20
HolmuskSingaporehealthtechHealth tech, data analytics, AI21.5
PropzyVietnamProptechGaw Capital; Softbank Ventures Asia; Next Billion Ventures;
RHL Ventures; Breeze; FEBE Ventures; Rsquare;
Insignia Ventures Partners
25
TONIKSingaporeFintechSequoia Capital India, Point72 Ventures,
Insignia Venture Partners, Credence Partners
21
IncomlendSingaporeFintechSequoia Capital India, CMA CGM Group20
2019Kopi KenanganIndonesiaF&BSequoia Capital India (lead),
Serena Ventures, Jonathan Neman, Arrive, Caris LeVert
20
RWDC IndustriesSingaporeBiotechVickers Venture Partners, WI Harper Group
(Existing Investor) and Eversource Retirement Plan Master Trust
22
Deskera SingaporeTechnologyNaver Corp. (South Korea)40
AspireSingaporeFinancial ServicesMass-Mutual Ventures Southeast Asia (Lead), Arc Labs,
Y Combinator, Hummingbird, and Picus Capital
50
Neuron MobilitySingaporeElectric Vehicles, IoTSquare Peg Capital (lead), GSR Ventures, Seed Plus, Seeds Capital, Didi18.5
Trusting SocialVietnamFinancial ServicesSequoia Capital, 500 Startups, and BeeNext25
2018MediSix TherapeuticsSingaporeHealthcareLightstone Ventures (Lead), Temasek Holdings,
Osage University Partners
20
Lion TCRSingaporeHealthcareYashang Capital, Westlake Ventures Capital20
ArkSingaporeHealthcareVenturecraft (lead), Gaorong Capital40
DeskeraSingaporeTechnologyJungle Ventures, Cisco Investments, Tembusu Partners,
Susquehanna International Group, Innoven Capital
60
Common GroundMalaysiaReal Estate-20
EV HiveIndonesiaconsumerSoftBank Ventures Korea (lead), H&CK Partners,
Tigris Investment, Naver, LINE Ventures, STIC Investments,
East Ventures, SMDV, Sinar Mas Land, Insignia Venture Partners,
Intudo Ventures, Michael Widjaya, Chris Angkasa
20
KoinworksIndonesiafintechMandiri Capital Indonesia (lead), Gunung Sewu,
Convergence Ventures
16.5

The investment sizes in 2020 and 2021 are much higher than the more common $5-15 million range seen in early-stage fundings in Indonesia.

So far, large Series A rounds were mostly centered around Singapore, which clocked four $15 million-plus Series A transactions every year from 2018-2020 as investors were drawn to early-stage startups in the country’s healthcare, biotech, cloud computing, and IoT sectors.

In 2021, so far, Singapore’s iStox is the only non-Indonesian startup to raise a big-ticket Series A round.

Maturing market

“I think it [larger early-stage funding in Indonesia] is a sign of the market maturing, as well as more capital being available in the hands of investors. Folks who move early and execute better could build the next Gojek. So VCs are okay funding bigger-ticket deals to make sure you win,” Krishnan Menon, CEO, and co-founder of the digital bookkeeping app BukuKas, told DealStreetAsia when asked about the trend.

BukuKas raised a $10-million Series A round in January this year and secured $9 million in its pre-Series A round.

Joshua Agusta, director at Mandiri Capital Indonesia, the investment arm of the state lender PT Bank Mandiri Tbk, says there are not enough quality startups to meet the current investor demand. “Not every startup has the same good quality. Therefore, the valuation of startups will get higher,” Agusta said.

Aldi Adrian Hartanto, vice-president, investment at the VC firm MDI Ventures echoed this opinion: “There are more investors in Series A, which means the probability of raising funds in that stage is higher. However, the number of startups, especially the high-quality ones, available is less.”

The higher ticket size in January shows the market is “starting to be hopeful about post-COVID trajectory,” he added.

Most Indonesian startups that raised massive money in their early stages are online businesses with an offline component such as logistics, offline distribution, or inventory management. Hence, their costs are enormous compared with online-only startups, said Agusta.

He is, however, sceptical about the future of fintech investments, as investors have been drawn to the sector lately by a surge in retail investors during the pandemic.

Preferred destination Indonesia

Some investors believe Southeast Asia, Indonesia in particular, will attract more startup funding this year, as the market has become more mature.

Chandra Firmanto, managing partner at Indogen Capital said: “Next year will be a boom year for investment. Big tech companies will go for IPOs, and some of the investors want to have a stake in that pie. Therefore, they are aggressively expanding to Southeast Asia, as the political condition is relatively stable here compared to other countries.”

Firmanto predicted that Indonesian startups’ fundraising amount will double this year compared to last year, given the positive start to the year.   

A study by Google, Temasek, Bain & Company predicted that Southeast Asia’s digital economy will top $100 billion gross merchandise volume (GMV) in 2020 and reach $300 billion by 2025. The lure of growth has caught the attention of global investors.

“There is a better focus on Indonesia by foreign funds as the country is on the global map now. There are more and more founders doing interesting things across sectors,” Menon of BukuKas added. 

Major global investors like Sequoia Capital India and SoftBank are participating in the big-ticket funding rounds, said Hartanto of MDI Ventures. “These investors have billions of dollars in dry powder that need to be deployed within three years after launching the fund. Moreover, they can only invest in India and Southeast Asia.”

Hartanto stressed Indonesia and Singapore will still be the investors’ preferred destination. Indonesia has a vast local target market with significant gap issues to be solved. Meanwhile, Singapore remains the regional market for growth.

Ardi Wirdana contributed to this story.

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.