BIG FIRMS BETTING ON INDONESIA TECH START-UPS
Investors capitalising on Southeast Asia’s largest online mart, growing middle class
JAKARTA cash into its technology sector over the past two years, helping support dozens of homegrown start-ups ranging from ride hailing apps to e-commerce firms.
And with a population of more than 250 million, a swelling middle class and growing availability of cheap mobile devices, firms from across the world are piling in.
“We believe that Indonesia is poised for a huge leap forward for its digital economy, following China’s growth and becoming the leading tech destination in the Southeast Asia region,” said Adrian Li, a partner in Convergence Ventures, here.
Last year, US$631 million (RM2.7 billion) in disclosed venture capital was ploughed into the country, according to research firm CB Insights, up from US$31 million in 2015.
But that figure had already been shattered this year, with US$3 billion worth of deals clinched as of last month, said Meghna Rao, a tech industry analyst at the firm.
Tokopedia — a marketplace that allows users to set up online shops and handles transactions — won US$1.1 billion in capital from China’s Alibaba in August.
Motorcycle on-demand service Go-Jek secured US$1.2 billion from Chinese tech giants JD.com and Tencent Holdings in May, according to data from Crunchbase.
In another sign of confidence, Koison became Indonesia’s first e-commerce service to go public this month.
Indonesia’s mobile-first market will comprise more than half of Southeast Asia’s e-commerce market by 2025, with an estimated value of US$46 billion, according to a Google report.
“When you do start-up business in Malaysia, Singapore, Thailand and Indonesia, the cost, effort and time that you spend is almost even. But when you go to Indonesia (growth) is unlimited — the market is so big,” said Willson Cuaca, whose venture capital firm East Ventures specialises in early-stage investments.
As a result, big names like US venture capitalist Sequoia Capital, Japan’s Rakuten Ventures and travel company Expedia, as well as Chinese tech giants, have all made investments in the country. AFP