says the reported difficulties by subscribers of mobile phone operator XL Axiata to access the online retailer on Friday (04/03) has had no noticeable impact on web traffic to its website. (SP Photo/Ruth Semiono)

2015 Seen as Boom Year for Indonesian Startups


JANUARY 11, 2016

Jakarta. The growth of Indonesian startups boomed in 2015, with at least 70 publicly announced investment decisions being reported as well as the birth of two angel investor clubs, research by local media startup Daily Social shows.

"[2015] was an amazing year for the startup ecosystem in Indonesia. Although there are some challenges, growth in the industry still looks super attractive and has slowly begun to have a broad impact on society," Daily Social said in its Tech Startup Report, which was published on Monday.

Among the most prominent startup funding reports were Sinar Mas Group's undisclosed funding to grocery app HappyFresh and Thailand's aCommerce, as well as Lippo Group's $500 million pledge for its e-commerce site Matahari Mall, according to the report.

E-commerce companies dominated tech investments last year with 33 companies reportedly securing funding, followed by fintech startups — or startups focusing on financial services —  with six companies, according to the report.

While the industry is growing fast, much of the startups in Indonesia are still in very early stages of growth. Seed funding and Series A funding, both typically given to startups that are considered at high risk of failure, made up 49 percent and 30 percent of total investment, respectively, last year, the report says.

Meanwhile, both Series B and Series C represented 4 percent of total investment and funding from private equity firms  usually given to more mature companies — made up a mere 3 percent, Daily Social reported.

Still, the report noted that funding for startups was not drying up, with last year's addition of two new networks for so-called angel investors  ANGIN and Angel-eQ Network — bringing the total number of angel investors in the country to over 100.

Angel investor is a term used to describe affluent individuals putting money in startups typically in exchange for convertible debt or ownership equity.

"Our ecosystem needs much more angel investment," Dondi Hananto, an angel investor and founder of venture capital Kinara Indonesia, said in the report. "We cannot sustain so much venture capital operating in the country without angel-invested companies feeding their pipeline."