Jakarta. Indonesia is likely to have more than five startups worth at least $1 billion each by 2019, with healthcare and education the most promising sectors to spawn new unicorns in Southeast Asia's biggest economy, its communication minister told Reuters.
Driven by a youthful population of more than 250 million people owning at least 100 million smartphones, Indonesia has seen a rapid growth in the number of startups trying to capitalize on this potential in a growing economy.
The country currently has four unicorns — companies that have reached $1 billion in valuation without tapping the stock markets — including ride-hailing company Go-Jek, travel site Traveloka and market places Bukalapak and Tokopedia.
"Among Asean [the Association of Southeast Asian Nations] countries we have seven unicorns and, out of seven, four are from Indonesia," said Communication and Information Minister Rudiantara, noting that even one of the unicorns outside Indonesia derived most of its revenue from the country.
"I believe we'll have more than five unicorns until 2019," Rudiantara said in an interview.
Investors in Go-Jek include Tencent Holdings, with Alphabet's Google joining the latest fundraising. Tokopedia has backing from Alibaba and SoftBank Group, while Traveloka's backers include Expedia and JD.com. Bukalapak investors include Singapore's GREE Ventures.
The minister said that a unicorn was likely to come from the education sector.
"If we see the numbers, I project that has to come from [the] education [sector]," he said.
Under Indonesia's constitution, the government has to spend a fifth of its annual budget on education, so even excluding private spending an app or startup only needed to get a small percentage of this "huge" potential, he said.
Indonesia's state budget for education was Rp 400 trillion ($29.50 billion) in 2017.
The minister said the biggest local app for education currently is Ruanguru.
The other most promising sector to develop a unicorn is healthcare, which has a state budget of more than Rp 100 trillion, he said.
He noted the development of startups like HaloDoc, which offers online medical consultation, and others including Alodokter.
On funding, the minister said he wanted to help make it easier for unicorns to apply for initial public offerings in Indonesia. Local regulations prevent listings before companies have made a profit for a number of years.
"If necessary, I will go to the OJK [financial regulator] to solve this issue," he said, adding the government should no longer be just a regulator.
"It's an old model. The government has to be the facilitator," Rudiantara said.