[Interactive Data] Indonesian Startup Funding Q1 2021 Increases 2 Times, Books IDR 8 Trillion

The year 2021 can be said to be a turning point in the revival of the industry after months of being hit by distractions due to the pandemic. Along with the increasingly massive distribution of vaccines to prevent the transmission of Covid-19, various business arrangements have returned to their path of growth. The Indonesian startup ecosystem is no exception.

Among the various variables that can be used as a benchmark for assessment, the funding transaction is the one that we feel is quite relevant. Reasonably enough, every investor has a very strict hypothesis – both an assessment of business fundamentals, to the state of the national macro economy – that convinces them to put their money into a business.

From the records of our research team, during Q1 2021 there were 40 Indonesian startup funding transactions, recording funds [of 24 transactions whose value was announced] worth $554,7 billion or equivalent to 8 trillion Rupiah. The highest score was obtained by round series B SiFast with a total value of $170 million, followed by a magical Series A funding that posted a total of $90 million [series A and Series A+ combined].

Delving deeper, throughout the beginning of this year initial funding still dominated. However, different from previous years, now there are more series A [16 transactions] compared to seed funding [12 transactions].

Compared to the same period in the previous two years, in terms of value and quantity of funding the value increased more than 2x. In 2019 there were 26 funding announced with a transaction value of $156,9 million, while in 2020 there was a slight decrease with 21 transactions and an announced value of around $42,9 million.

For your information, in this graph we do not include funding rounds in startups unicorns/decacorns. In Q1 2019 Bukalapak closed its series D round with a value of $50 million, while in Q1 2020 Gojek closed series F round at $1,2 billion.

Fintech dominated total funding in the first quarter of this year with 14 transactions, followed by SaaS [7] and EdTech [3]. Even if we look at it from the perspective of the value of funding recorded, the ecosystem fintech raising a total investment of $315,8 billion. And if you look deeper, the type of service fintechThey are also quite diverse, starting from (1) investment platforms (Bibit, Ajaib, FUNDtastic, Pluang), (2) loans (Amartha, Dana Cita, Pintek, GajiGesa, Natural), (3) open banking (Xendit, Brick), and (4) digital payments represented by LinkAja and (5) insurtech represented PasarPolis.

Investment climate analysis

Throughout Q1 2021, as many as 114 venture capitalists (VC) participated, including dozens angel investors. Indonesia-based VCs such as East Ventures [5 transactions], AC Ventures [5], and Alpha JWC Ventures [4] were the most active in participating in startup funding rounds. Interestingly, more global and regional VCs are getting involved, some with three transactions each: Saison Capital, Sequoia India, Y Combinator, Insignia Ventures Partner.

Global investor participation is a breath of fresh air for the development of the ecosystem, making it possible founder new products with their unique innovations are getting even better exposure. In addition, it allows for a more comprehensive transfer of knowledge - considering that currently the development of digital products is still largely based on business models that exist abroad. Then, experience overallbusinesses can make it easier for local startups to expand outside Indonesia.

Nevertheless, many global investors also see various problems in Indonesia as potential that can be solved by startups. This is proven by their participation in several rounds of investment in startups that focus their business on the local market - for example logistics startups.

On the other hand, the cyclefounder to investors” is also starting to appear. In the Q1 2021 funding range, founder Memories Coffee and Bukalapak, through its venture unit, is involved in startup investment. Based on data Startup Report 2020, currently the valuation of Kopi Kenangan has almost reached $1 billion. This cycle is also possible founder new to get better support – including learning about the success its investors have had in building businesses in Indonesia.

With the existing investment climate, we are quite optimistic that the Indonesian startup ecosystem will still experience better growth in the future. A business that is becoming more mature – proven by its resilience through the pandemic – will also provide good validation to gain more trust from investors. On the other hand, the number of digital consumers in Indonesia continues to increase amidst digitalization during the self-quarantine period.

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