Global firms join rush to bet on Indonesia as next start-up frontier
JAKARTA: Big-name investors including Expedia and Alibaba are pumping billions of dollars into Indonesian tech start-ups in a bid to capitalise on the country’s burgeoning digital economy and potential as Southeast Asia’s largest online market.
Indonesia has seen a surge of 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,” Adrian Li, a partner in Jakarta-based Convergence Ventures, told AFP.
Last year US$631 million 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 has already been shattered in 2017, with US$3 billion worth of deals clinched as of September 2017, 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.
Motorbike 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 in October.
“While it’s too soon to say that this investment is indicative of a larger pattern of Indonesian startups pulling in many big ticket investors, it is part of a growing clutch of mega-rounds,” Rao said.
Internet use is growing faster in Southeast Asia than any other region in the world, with 124,000 users coming online every day over the next five years, according to a 2016 report from Google and Singapore’s Temasek Holdings.
By 2020 an estimated 480 million people are expected to be connected to the internet, up from 260 million in the region last year. — AFP