The startup scene in Indonesia is one of the most vibrant in the entire Asian landscape. The digital economy in the archipelago has been expected to become the largest in the Southeast Asian region. Google estimates that the startup ecosystem will triple in value to $100 billion by the year 2025 as Indonesia is home to a large, mostly young and increasingly tech-savvy population. There are thousands of tech startups and four homegrown unicorns in Indonesia today. The tech startup landscape is lucrative for both the entrepreneurs as well as the investors. In the past few years, accelerators and incubators have mushroomed across the economy that have helped channel a lot of investments into the startup sector. According to a Daily Social report, 51 startups across the archipelago received investment in 2018. These included 20 seed funding transactions, 14 cases of Series A funding and 11 instances of Series B funding.
Besides the investments that went into the 4 Unicorns, there was a total investment of $274 trillion that was received across the startup landscape in Indonesia.
FinTech and e-commerce startups are the distinct winners when it comes to receiving the most investment.
The FinTech startups have had the most growth in recent years, especially the ones dealing in P2P lending. These startups have had an increasingly large role in the financial services provisions to the local market. In the first three quarters of 2018 alone, FinTech startups lent $951 million and these figures are expected to grow exponentially in the coming years as more and more of the market comes online and seeks digital solutions to their financial-services needs. Indonesian Financial Services Authority (OJK) predicts that the lending by these FinTech startups will have more than doubled by the end of this year.
Digital payment solution providers were another solid player in the FinTech startup scene last year. Reports predict that the mobile payment solutions will present a $30 billion growth by 2020 and will have compound annual growth rates of 158% this year and the next.
The modern retail sector is another promising area that raised major investments last year. A startup that goes by the name “Warung Pintar” raised a $4 million investment in February and then another $4 million investment later in August. The company reportedly grew by an astounding 3,477% in its very first year in business. The startup has installed over 319 smart kiosks across Jakarta that are run by micro-entrepreneurs.