While it is unlikely that any country in Southeast Asia, or indeed the world, will escape the negative economic impacts of the COVID-19 pandemic, some countries seem likely to come out of it relatively undamaged. Indonesia is one such economy. With a robust startup ecosystem and growing tech development environment, Venture Capitalist (VC) investments in Indonesia are continuing to pour in despite the global economy balancing on a knife-edge.
A recent review by Deal Street Asia noted that VCs in Indonesia and around the world are still very eager to invest and that the Indonesia startups scene is the hero needed to help keep the country out of severe economic trouble.
The review also stated that in Southeast Asia, over 184 funding deals in the 2nd quarter of the year had raised a sum likely to be in excess of $2.8 billion USD. While slightly down on the first quarter’s $1.9 billion USD, it is an excellent indicator that VCs are confident that the region will bounce back quickly and continue to evolve as one of the world’s most important areas when it comes to tech startups.
So what companies are drawing in the most significant investments? We take a look at some of Indonesia’s top-funded companies so far in 2020.
With the phenomenal growth in online shopping lately, in part due to the pandemic making people more unlikely to go out to shop, a platform like Tokopedia is a natural winner. One of Indonesia’s most prominent tech startups, with over 90 million users a month, and the second most significant eCommerce platform in the country, Tokopedia is considered as a solid choice for investors.
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This dependability and confidence in the online superstore is clear from the funding that it has managed to raise in the past few years. Even a global Black Swan has failed to scare investors away from this unicorn, rumoured to have raked in at least $500 million USD but possibly $1 billion USD from a recent funding round involving Singaporean VC firm Temasek and Google. With substantial funding, a growing market and heavy-hitting partnerships with global marketing giants GroupM and K-Pop giants BTS, this is one eCommerce platform that has no intention of becoming a victim of a recession.
Originating in neighbouring Singapore, Ninja Van has grown to be one of Indonesia’s biggest courier companies. This high-tech logistics firm has branches throughout the region and focuses on connecting the ASEAN area with the rest of the world, with around 1 million parcels delivered daily.
The company won funding in the sum of $279 million USD in May from backers such as the B Capital Group, a VC co-founded by the former Facebook executive, Eduardo Saverin, and Singaporean ride-hailing unicorn Grab. With more money to expand the operation and to increase its presence in Indonesia, Grab – Transport, Food Delivery & Payment Solutions. Ninja Van is likely to consolidate its delivery partnerships with eCommerce platforms Tokopedia, Shopee and Lazada as well as those with big brands such as Crocs and FujiFilm.
With investments from tech titans such as Tencent and Google, it is no wonder that Gojek has already reached decacorn status. However, the Jakarta-based ride-hailing company received a further boost to their coffers recently with the addition of more funding of over $3 billion USD from investors, including Facebook and PayPal. Not only did Gojek receive funding, but they have negotiated closer tie-ins with both companies too.
Already having a relationship with Facebook’s Instagram, Gojek is now working closely with Mark Zuckerberg’s company to connect with customers on the social media platform and through the messaging service WhatsApp. The investment from PayPal brings with it an opportunity for both companies to work together with the payment platform integrating with the already popular GoPay system.
How this Indonesian logistics startup is planning to dominate the local market
Even though the main focus has been on investments in Indonesia, other markets in Southeast Asia are also managing to keep VCs interested. Vietnam, in particular, has seen a continued interest in its burgeoning startup scene. That said, the VCs in Indonesia appear to be doing the heavy lifting for the region and seem the most eager to spend. The country has one of the largest populations in Asia and has a large number of young, tech-savvy people and a high percentage of internet usage. These factors undoubtedly contribute to the potential for growth in the new digital age, helping to throw the investment spotlight firmly on this developing nation.
The future looks bright and prosperous for those involved in enterprise in the country, and the Indonesia startups sector looks set to buck the trends and continue to grow despite the possibility of a global recession.