Indonesian Startup Outlook for 2024

Indonesian Startup Outlook: Challenges & Opportunities

  • InCorp Editorial Team
  • 19 June 2024
  • 5 minute reading time

As we enter 2024, the Indonesian startup ecosystem is at a crossroads. While boasting a large and internet-savvy population, the global economic slowdown casts a shadow over its previously rapid growth.

Indonesian Startup Ecosystem and Its Current Standing

Indonesia has immense startup growth potential, fueled by its expansive market size and widespread internet usage. While most Indonesian startups operate in the digital sphere, their unicorn counterparts span various sectors, including logistics, travel, ticketing, and financial technology services.

Regarding funding, data from the Statista Research Department as of January 2024 stated that Akulaku, an emerging digital banking and finance platform in Southeast Asia, emerged as Indonesia’s top startup. 

The calculation is based on its accumulated funding over the past two years, totaling approximately 310 million U.S. dollars. Moreover, despite their status as leading startups, some companies need help to overcome challenges. 

Bukalapak, Indonesia’s first unicorn listed on the Indonesian Stock Exchange in 2021, saw its value decline significantly after its 1.5 billion U.S. dollar public offering.

Similarly, GoTo Group, an Indonesian decacorn, encountered difficulties in 2022 following its IPO, leading to a reduction of 1,300 employees in November 2022 due to adverse macroeconomic conditions aimed at improving financial stability.

Main Highlights Southeast Asian Startup Ecosystem in 2024

Indonesian Startup Outlook for 2024

The Asian Development Bank forecasts a 4.7% expansion in the region’s GDP for the current year, up from 4.3% in 2023. 

Aligning with these estimations, analysts at Nomura Global Research anticipate that the ASEAN-5 nations—comprising Indonesia, Malaysia, the Philippines, Singapore, and Thailand—will collectively grow at a rate of 4.5% in 2024, compared to the 3.9% recorded last year.

Investment allocations at the country level continue to be concentrated in Singapore and Indonesia, with these two countries accounting for over 70% of funding since 2019. This trend is likely to persist throughout the current year as well.

Furthermore, the beginning of the year has seen a strong start in terms of fundraising activities for Southeast Asian startups, as highlighted below:

CompanyFunding TypeLocationAmount (USD)Investors
Asia PartnersFundraisingSingapore474 million
Silicon BoxSeries BSingapore200 millionSeveral companies
AtomeFintechSingapore31 millionAdvance Intelligence Group
Swap EnergySeries AIndonesia22 millionQiming Venture Partners, GGV Capital, Ondine Capital
Maya InnovationsSeries CPhilippines80 millionSeveral investors
KomunalSeries AIndonesia5.5 millionSumitomo Corporation Equity Asia, Several investors
SemaaiFundingIndonesia4.7 millionCyberAgent Capital
Funding SocietiesInvestmentSingaporeUndisclosedMalaysia’s Khazanah Nasional, CGC Digital

6 Types of Promising Startups in Indonesia

The Indonesian startup ecosystem is brimming with potential, offering fertile ground for diverse ventures. Here’s a breakdown of 6 prominent types of startups.

Fintech

This sector leverages technology to improve and innovate financial services, encompassing mobile payments, digital lending, and wealth management.

E-Commerce

This category involves businesses facilitating online buying and selling of goods and services, including marketplaces, on-demand delivery, and social commerce.

Edtech

These startups use technology to enhance and personalize the learning experience, offering online courses, educational apps, and learning management systems.

Healthtech

This sector utilizes technology to improve healthcare delivery and accessibility, encompassing telemedicine, health data management, and remote patient monitoring.

Agritech

These startups aim to modernize and optimize the agricultural sector through technology, including solutions for precision farming, smart irrigation, and online marketplaces for farm products.

Sustainability Tech

This category focuses on developing technology solutions for environmental and social impact, encompassing renewable energy, waste management, and resource efficiency.

Indonesia’s startup ecosystem has witnessed significant growth, closely tied to increasing venture capital funding, which nearly doubled over five years. With over 340 investments in 2022, the country saw its highest number of venture capital deals.

By early 2022, more than 200 startups had raised at least a million dollars in funding, reflecting the expanding investment landscape. Indonesia has eight unicorns and two decacorns, including GoTo Group and J&T Express.

Moreover, some challenges surrounding startup development include:

Fundraising

Fundraising remains challenging, particularly during tech winter, as investors become more cautious about deploying capital.

Profitability

Major tech companies in Indonesia face pressure to demonstrate profitability, as those listed on the stock exchange have yet to achieve it. This has led to market skepticism regarding the future potential of technology firms.

Ecosystem Beyond Jakarta

There’s a pressing need to expand the startup ecosystem beyond Jakarta despite it being a prominent hub. Challenges such as talent shortages and logistical obstacles persist.

Which Sectors Are Best for Startups in Indonesia for 2024

Some potential sectors that will likely experience exponential growth in 2024 are:

  • tech-based production and distribution of poultry
  • automated logistics
  • digital-based supply chain
  • parenting platform
  • electric motorbike manufacturing
  • social commerce
  • financial assets platform

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Launch Your Indonesian Startup with InCorp

Indonesia’s booming startup scene, fueled by a massive market and rising internet adoption, is ripe with opportunity. InCorp Indonesia is your trusted partner for a smooth and successful launch with our:

Whether you’re a local entrepreneur or an international investor, we guide you through every step, minimizing complexities and maximizing your chances of success in Indonesia’s dynamic startup ecosystem.

Pandu Biasramadhan

Senior Consulting Manager at InCorp Indonesia

An expert for more than 10 years, Pandu Biasramadhan, has an extensive background in providing top-quality and comprehensive business solutions for enterprises in Indonesia and managing regional partnership channels across Southeast Asia.

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Frequent Asked Questions

There are three things business owners need to consider before setting up a business in Indonesia: the type of business entity, capital requirements, and regulations.

Indonesian regulations separate local companies from foreign companies. Generally, foreign-owned companies (PT PMA) have more limitations than their local counterparts (Local PT). However, to pursue more foreign direct investment in the country, the government has taken several bold initiatives to increase the ease of doing business and provide numerous attractive incentives for foreign investors.

There are two main types, namely, primary business licenses and non-primary business licenses. The primary ones commonly apply to various industries, such as general and industrial business licenses. Additional non-primary ones are included, depending on the operations of your business. Examples of non-primary business licenses are operational and commercial licenses.

Yes, you must apply for it to be able to issue work permits for your foreign employees. This permanent business license is also a prerequisite for the applications for other business licenses and import licenses.