In the past few years, Indonesia has risen to become a prominent economy in ASEAN. According to Tech Collective, this vast archipelago is a business and innovation hotspot, attracting strong attention and funding from investors around the world…

How strongly is the Indonesian startup ecosystem growing?

Despite the difficulties besetting the world’s technology sector, Southeast Asian startups continue to shine in the investment field, promising new development paths.

Forecasts suggest the market value will grow to a whopping $130 billion between 2022 and 2025, highlighted by an impressive compound annual growth rate (CAGR) of 20%.

By 2025, the region’s tech startup valuation is expected to rise to an unprecedented $1 trillion, up from $340 billion in 2020, with Indonesia a significant contributor. on these numbers.

THE RISE OF THE INDONESIA START-UP ECOSYSTEM 

Today, Indonesia stands out as the preeminent e-commerce powerhouse in this growing market, accounting for nearly half of the market share in the region. The platforms that dominate this market are Shopee and Tokopedia, accounting for 36% and 35% of the country’s Gross Merchandise Value (GMV), amounting to 51.9 billion USD, respectively.

Indonesian e-commerce, led by online shopping giants such as Tokopedia, Shopee and Bukalapak, has seen explosive growth in the past few years. 

The government is also implementing talent nurturing programs to promote a stronger transformation of the ecosystem, including initiatives such as the 1000 Startup Digital program to support the establishment of technology enterprises. new digital technology or establishing an Indonesian Investment Fund to inject capital directly into startups.

Some of Indonesia’s leading dynamic centers today are Jakarta and Bandung. In particular, Jakarta is the “gathering place” of a list of successful unicorns, including Ruangguru, Halodoc and Traveloka. And Bandung is home to innovators Bukalapak and Cognitiv.

HUMAN RESOURCES IN THE INDONESIA TECHNOLOGY INDUSTRY ARE INCREASINGLY TRAINED 

Like many other Southeast Asian countries, the driving force behind Indonesia’s entrepreneurial spirit is its young and tech-savvy population. With an average age of 30, the country has a “passionate” and skilled workforce. Along with that, with continuously improving teaching quality, Indonesian universities are providing a large number of graduates proficient in technology and engineering fields.

With a population of more than 270 million and a growing middle class, this demographic landscape creates fertile ground for new ventures, especially in the eCommerce sector.

INVESTMENT IS THE ENGINE THAT PROMOTES THE GROWTH OF THE INDONESIA ECOSYSTEM

Famous global organizations such as Sequoia Capital and regional companies such as East Ventures are already present in Indonesia, providing financial support and strategic advice to promising Indonesian startups.

Access to capital is often the boundary between a good idea and a project being executed. For startups, this means the ability to invest in research and development, as well as realize breakthrough ideas at the forefront of the market.

On the other hand, platforms like Kitabisa allow companies to bypass intermediaries and negotiate directly with interested investors or customers. This model not only optimizes the capital raising process but is also the fastest test to evaluate the quality of a product or service.

Additionally, other financing solutions, such as revenue-based financing, peer-to-peer lending, and angel investing have gained traction, each offering a own interests and criteria. But overall, these methods provide a more flexible, tailored approach to startup funding.

The startup ecosystem in Indonesia is charting a strong path of innovation with a significant impact on the country’s economic structure. As Indonesia has more and more advanced technological breakthroughs in artificial intelligence, machine learning and sustainable solutions, the funding market will also become more vibrant in the country.

This positions Indonesia as an important gateway to Southeast Asia, attracting stakeholders from around the world to the thriving ecosystem and promising opportunities in this dynamic region.

Ngo Huyen (Source: vneconomy.vn)