Report: Despite Pandemic, Indonesian Startups Raised US$1.9B in Funding by Q3 2020

Report: Despite Pandemic, Indonesian Startups Raised US.9B in Funding by Q3 2020

The Indonesian venture capital (VC) firm association (Amvesindo) announced in a virtual event today that Indonesian startups had secured US$1.9 billion in funding through 52 funding rounds by Q3 2020 –just as the COVID-19 pandemic peaked in Southeast Asia and many parts of the world.

These funding rounds were dominated by three verticals: Fintech, edutech, and SaaS with six transactions respectively.

Of the companies that have made significant funding round announcements within this period, F&B chain Kopi Kenangan topped the list with US$109 million in funding followed by logistics tech startup Kargo with US$31 million.

According to Amvesinso, the remaining challenge that the industry continues to face today includes profit and revenue sharing instrument from the VC firms’ portfolio companies.

In line with the growth of the VC industry, the micro-finance industry in Indonesia also experienced growth. The association praised this progress, especially when considering the social impact that micro-financing can make to the finance ecosystem in the country, especially in the financial inclusion aspect.

In the near future, Amvesindo predicted that the Indonesian VC industry will continue to experience growth. They predicted social commerce, food tech, and any verticals that are related to digitalisation of supply chain and SMEs.

The association also highlighted the role that startups play in helping the national economy to recover from the impact of the pandemic. It gave the example of agritech startups that enable financing for farmers, and digital identity providers that enable banking institutions to ease credit restructuring process.

Amvesindo hopes for more investment in sectors such as farming and agriculture, in addition to verticals with high growth potential.

Founded in 2016, the association was started by 12 VC firms in Indonesia with the goal to become a gathering forum for industry players. It also aims to help the government and the Financial Service Authority (OJK) in setting up regulations and programmes.

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