1. Startups

The Journey of a Decade of Indonesian Startups: More Diverse and Innovative

Flashbacks, tricky challenges, and best wishes

The term "Rome was not built overnight" may be appropriate to pin on the journey of the country's technology startup industry. Why not? Behind the size of the industry which is currently filled with startups with gigantic valuations, in the past decade, it seems that there have been many interesting and important stories and moments that we can observe, as well as understand the journey of a decade of Indonesian startups that have been diverse and innovative. Like what?

Early 2010s developments: The dotcom bubble burst and the birth of the e-commerce ecosystem

Post dot com bubble, the Indonesian digital industry is trying to play in the consumer and social spheres. Some startup names that were born in this era can still be found today, such as for example; Bhinneka (early phase of e-commerce), Kaskus (social commerce), classified ads (Tokobagus, Berniaga, OLX), to group buying platforms such as Disdus and Groupon.

Even though the digital economy is still relatively “young”, several local startups in this era are known to have started to show off in the eyes of investors and global technology entities. This is shown through several important moments that you may still remember well. Call it the achievement of significant funding for the largest local community site, namely Kaskus by Global Digital Prima (GDP) Ventures. Not to mention the "lovey-dovey" story between Koprol and Yahoo! (although with a short lifespan), and also the taste of Disdus' business in the eyes of East Ventures, which also led to the acquisition of Disdus by Groupon (the leader of the global online shopping deals market at that time).

All these sweet stories take us into an era called "the new era of e-commerce", where in recent years new e-commerce players have begun to emerge one by one. Starting from the presence of the Rocket Internet group network (Zalora and Lazada), as well as the establishment of Tokopedia and Bukalapak which have started to build a promising reputation and traction.

A ten-year journey of Indonesia's startup industry. Doc: Midtrans

This situation eventually prompted several startups that support the e-commerce ecosystem (as well as other digital business supports), such as the payment gateway service pioneered by Veritrans (now Midtrans), to the presence of price comparison services (e-commerce aggregator) such as Telunjuk which also enlivened the ecosystem. .

Mid-2010s: The diversity of startup businesses that are increasingly rich in innovation

Entering the mid-2010s, the local startup industry was increasingly crowded with new startups that focused on providing various service platforms, ranging from on-demand services, fintech, OTA, to SaaS.

Gojek become one of the pioneer startups in the realm on-demand. Its rapid growth makes Gojek achieved “unicorn” status in 2016. As online transactions grew, digital-based financial services also began to emerge one by one with a variety of business models, ranging from e-wallet, microphone-lending, until financial services aggregator.

In this era, the lifestyle of berplesiran jumped sharply. This situation has succeeded in becoming a momentum for key players on the OTA platform such as Traveloka (valued a unicorn in 2017), and Tiket.com to stick their nails in the Indonesian digital economy.

Not to forget, other innovations from the SaaS platform also emerged in this era. After previously the SaaS platform was synonymous with the enterprise (B2B) market, startups such as Moka, Talenta, and MTarget are known to be targeting the MSME sector.

Entering the 2020s: Ecosystems that are increasingly mature and digital transformation “needs”.

At the end of the 2010s, the local startup ecosystem became stronger and began to act as a facilitator for digital transformation. For example, many startups are starting to show up to support O2O (offline to online) which is believed to provide opportunities for business people to reach a wider market, as was done by Moka, WarungPintar and also Wahyoo.

Not to mention the emergence of startups in the class”neweconomy” which are closely related to technological approaches such as Fore Coffee, Kopi Kenangan, HAUS!, and the like. Some have even managed to attract the attention of capital investors with a large amount of funding.

The shift from the conventional realm to digital is also represented by startups that offer EdTech services. In this era, many startups have emerged carrying solutions to the world of education through technology such as RuangGuru, Zenius, HarukaEdu, etc. The presence of various startups has also colored it when in the 2020s, the Indonesian startup industry already had 1 startup with a “decacorn” valuation, 5 “unicorns”, and 27 startups labeled “centaur”.

In early 2020, Indonesia's startup ecosystem was also affected by the Covid-19 pandemic. The challenges faced are varied. Quite a few startups have closed services or pivots. However, there are also many startups that have managed to adapt to find new opportunities or even make progress in the midst of an uncertain economic situation.

The need for digital transformation steps has become increasingly essential since the pandemic started. As innovators in the field of technology, local startups are able to bring digitalization steps to various types of businesses in various economic sectors. Like the collaboration carried out by Gojek and Tokopedia which produces GoTo, with one of its group entities namely, GoTo Financial which helps MSME businesses adapt and grow through payment services and digital business solutions.

What will the next decade be like?

Apart from the e-commerce industry, on-demand services, and also fintech which will continue to skyrocket, technological solutions for several other fields have interesting potential to be reckoned with.

Education Technology (EdTech) has a promising growth potential, when The pandemic has become a momentum for business acceleration EdTech. DSResearch report, ecosystem EdTech in Indonesia has been equipped by dozens more startups that offer a variety of services ranging from platforms e-learning, directories, SaaS, to fintech with a specialization in education funding. Besides that, PropTech (property technology) also had the same opportunity that now has filled by various startups which focuses on providing property solutions ranging from buying and selling to investment.

Insurtech (Insurance Technology) also has a big chance in the next decade. The DSInnovate report had stated, the massive market size of the homeland insurance business with a total written premium value of roughly more than US$ 20 billion (in 2020) proves that the potential land that can be worked on by InsurTech players is wide open. As of this writing, there have been 14 InsurTech startups with various business models.

Thus, over the last decade, the development of Indonesian startups has experienced very rapid development. Even with the Covid-19 pandemic, it has also spurred the pace of startups to continue to innovate and provide solutions. The journey so far proves that local startups can survive and even attract global attention.

This article is endorsed by midtrans.

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