Total investment in Indonesian tech startups fell 64% to $191 million in the first half of 2024 from $526 million in the first half of 2023, Traxun said on Tuesday.
In its “Geo Semi-Annual Report: Indonesia Tech H1 2024”, the global SaaS (software-as-a-service) based market intelligence platform said the first half of the year was marked by notable changes in funding and market activity in the dynamic landscape of Indonesia’s tech startup ecosystem.
Ranked 29th globally in fundraising as of the first half of 2024, Indonesia has proven resilient amid global economic challenges.
Total funding raised by Indonesia’s tech startup ecosystem fell 79% compared to the $918.3 million raised in the second half of 2023, highlighting the changing investment landscape.
The country’s fundraising shows a clear pattern across different stages: Seed-stage funding reached $26 million, down 42% from the $45 million raised in the second half of 2023 and down 27% from the $32 million raised in the first half of 2023.
The company’s early-stage funding was $113 million, down 42 percent from the $148 million raised in the first half of 2023. Meanwhile, late-stage investment was $52.2 million, representing a significant 92 percent decline from the $681 million raised in the second half of 2023, highlighting investor cautious sentiment towards later-stage ventures.
Looking at sectors, FinTech, InsurTech and Enterprise Applications emerged as the strongest performing sectors in the first half of 2024, indicating strategic areas of growth within the industry.
Despite the success of these sectors, the ecosystem did not produce any new unicorns in the first half of 2024, in contrast to one unicorn being born during the same period last year.
Indonesian fintech startups raised $128 million in the first half of 2024, down 61% from $329 million in the first half of 2023.
Funding for enterprise applications fell 56% from $104 million in 1H23 to $45.1 million in 1H24.
However, the InsurTech sector saw a significant increase in funding, from $7.5 million in the first half of 2023 to $47 million in the first half of 2024.
The first half of the year also saw less acquisition and initial public offering (IPO) activity compared to last year.
Three acquisitions were made, including DycodeX, AyoPajak, and Lifepal, down from six in 1H23 and 2H23, respectively.
Topindoku is the only company to list in the first half of 2024, signaling a weak IPO market during this period. This is lower than the four IPOs that took place in the first half of 2023.
Jakarta topped the list of fundraising by city in the first half of 2024, followed by Yogyakarta and Bandung, demonstrating the diverse regional growth in Indonesia’s startup ecosystem.
Jakarta-based tech startups raised $185 million, far outperforming those based in Yogyakarta ($3.5 million) and Bandung ($2.5 million).
East Ventures, AC Ventures and Alpha JWC Ventures maintained their positions as top investors across Indonesia’s tech ecosystem, while East Ventures, Insignia Ventures Partners and Beenext emerged as top investors focused specifically on the first half of 2024.
In terms of early-stage investments, Peak XV Partners, Vertex Ventures and Shunwei Capital led the fundraising effort, while MUFG Innovation Partners emerged as a top investor in the late-stage startup.
“Despite challenges, Indonesia’s tech startup ecosystem remains vibrant and adaptable, supported by strategic investments and sector diversification,” Tracxn said.
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