StartUp Funding Q1_2405307777_071132.pdf

Startup Funding

1. INDONESIA STARTUP
FUNDING REPORT 
Q1 2024
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2. Table of Content
•Overview
•Tech Winter Effect
•Fundraising Challenge
•Startup Funding Q1
•By Stage of Funding
•Equity vs Debt Funding
•By Industry Sector
•Top Funding Transaction
•Fintech
•Funding Growth
•List of Fintech Startup Funding
•M&A
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3. Tech Winter
Effects
Overview
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4. Tech winter in 2023.
In 2023, the "tech winter" significantly impacted startup funding globally, including in
Indonesia. Here's a brief overview of its effects on Indonesian startups:
1.Higher Competition for Funding and Lower Startup Valuations: Startups in
Indonesia experienced difficulties in raising funds as investors turn cautious,
leading to lower valuations.
2.Focus on Revenue Models: Investors favored startups with clear revenue
streams and paths to profitability, reducing investments in those with high
cash burn rates without a sustainable business model.
3.Increased Consolidation Probability: Economic pressures led to more
mergers and acquisitions in the tech sector, as startups sought to consolidate
to improve their market positions.
4.Resilient Sectors Attract More Investment : Sectors demonstrating
resilience, such as healthtech and edtech, saw more stable or even increased
investment flows.
5.Operational Adjustments: Many startups had to cut costs and refocus on
their core products or services to survive the challenging funding
environment.
The tech winter reshapes the startup landscape in Indonesia, pushing companies
towards more sustainable and efficient operational strategies.
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5. Fundraising remains challenging
In 2023, Indonesia's startup funding
declined sharply due to global
economic uncertainties, although
sectors like agriculture, health,
education, and green technologies
grew with government support.
Despite operational changes poised
to benefit agile startups in 2024,
ongoing global instabilities remain
challenging. The ecosystem needs
continued support and funding to
expand digital services across
various sectors.
Source: Dailysocial, Internal Analysis5
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6. Funding
Grows Slowly
Startup Funding
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7. DISCOVERY/SHIFT
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Funding Overview
Startup funding in Indonesia increased by 14.6% in the
first quarter of 2024 compared to the same period last
year. This rise can be attributed to several key factors:
●Improving Global Economy: The IMF projects a 3.5%
global growth rate for 2024, up from 2.9% in 2023,
creating a better investment climate.
●Renewed Investor Trust: Venture capital activity in
Southeast Asia has increased by 20%, with
Indonesia benefiting significantly.
●Emerging Tech Innovations: The rise of new
technologies, such as AI and green technology, has
attracted significant interest and investment.
Despite this improvement, funding levels have not yet
reached the highs of 2022, indicating room for further
growth in the startup ecosystem.
7 Source: IMF, Dealroom [email protected] 2024-05-29 16:50
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8. The overall distribution of funding remains similar to the previous year. The number of seed funding transactions still
dominates, while most funds are allocated to the growth stage.
Stage of Funding
Funding by stage (Q1 2024) Funding by stage (Q1 2022-2024)
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9. 46% of Q1 Funding is Debt
In Q1 2024, the total funding for startups showed
an almost equal split between equity and debt.
This is a new trend, as startup funding was
previously mostly in the form of equity. In some
cases, like with wagely, investors provided both
equity and debt in a single round.
Debt funding is typically used to help fintech
startups increase their lending to customers. It is
considered a faster negotiation process and less
risky financing. In this climate, debt allows
startups to raise much larger amounts from
multiple institutions.
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10. Equity vs Debt Funding
Although equity funding still dominates the startup funding
market in Indonesia and Southeast Asia, debt funding has
significant opportunities to make deeper inroads in this
region. One such opportunity lies in supporting the growing
fintech lending and insurtech industries. These business
models require substantial capital injections to expand their
operational reach and serve underserved markets,
particularly in developing markets.
Unlike equity, venture debt allows entrepreneurs to raise
capital without giving up significant ownership early on. It
also helps companies bridge the gap between fundraising
rounds, meeting investor targets and avoiding valuation
drops. While venture debt has long been established in
places like the US and Europe, it's gaining traction in
Southeast Asia, notably with initiatives like Singapore's
Venture Debt Programme launched in 2015. This trend
reflects a growing recognition of venture debt benefits in
the region's startup scene.
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11. Most Popular Sector
This funding landscape highlights investor
confidence in Indonesia's startups, showing
resilience and innovation across various sectors.
●Fintech: Significant investments driven by
digital payments and financial services.
●Agritech: Attention to tech improving
agricultural productivity and sustainability.
●Climate Tech: Funding for renewable energy,
waste management, and conservation.
●Edtech: Investment growth due to
pandemic-driven shift to online learning.
●Legaltech: Growth from tech solutions
streamlining legal processes.
●SaaS: Investments in cloud-based software
for business efficiency.
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12. Top Funding Transaction
In Q1 2024, Akulaku emerged as the top-funded startup in Indonesia,
securing significant venture debt investment. Notably, the majority of
the top funded startups this quarter are also in the fintech sector.
Why does fintech still dominate?
●Growing demand: Mobile internet penetration rose from 53% to
71% between 2019 and 2021, reaching over 195 million people.
95% of digital merchants plan to increase or maintain digital
payments, with 51% using digital lending solutions.
●Resilience during crises: Fintech platforms like KoinWorks
reduced portfolio damage from 15% to 5% during the pandemic.
●Shift to financial services: Capital market investors grew by
92.99% to 7.5 million, and mutual fund investors increased by
115.41% in 2021, driven by local wealthtech apps.
Startup Round Funding
Debt Funding $ 100,000,000
Series C $ 45,000,000
Series B $ 27,500,000

Debt Funding $ 23,300,000
Series B $ 23,000,000
Series A $ 22,000,000
Debt Funding $ 21,000,000
Series B $ 15,000,000
Venture Round $ 7,000,000
Venture Round $ 5,200,000
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13. Back to Normal
Mode
Fintech Funding
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14. Fintech Funding Growth
Fintech investment dominates funding in Indonesia because:
1.Market Potential: With nearly 300 million citizens, Indonesia
offers a large market, especially in the underserved MSME
sector. The industry has grown six-fold over the last decade,
with over 500 fintech players in 2024.
2.Engaged Ecosystem: Indonesia's fintech landscape covers
lending, payments, wealth management, insurance, and
fintech SaaS. Over 60 million are active payment users, 30
million have accounts in P2P lending, 9 million retail investors
in wealthtech, and 6 million SMEs using financial SaaS.
3.Growing Transaction Values: Fintech transactions have
grown significantly, with over $20 billion in e-wallet
transactions from 2017 to 2021, a 123% CAGR. $17 billion in
loans were disbursed from 2017 to 2022, and the net asset
value exceeded $20 billion in wealthtech during 2021.
4.Support for Innovation: Despite much funding to mature
companies, 60% of deals support early-stage companies,
showing investor confidence in emerging innovation and
future growth.
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15. List of Fintech Funding
Here is a list of fintech funding announcements made public during Q1 2024. Not only did fintech companies
secure the highest number of transactions, but they also dominated the total funding volume for this period.
Startup Round Funding Investor
Akulaku Debt Funding $ 100,000,000 HSBC
AwanTunai Series B $ 27,500,000 Norfund, MIUP, FinnFund
Ayoconnect Venture Round Mandiri Capital Indonesia
Fairbanc Debt Funding $ 23,300,000 Pegadaian
Investree Venture Round $ 7,000,000 SBI Holdings
Komunal Series A $ 5,000,000 Sumitomo Corporation Equity Asia, Jafco
Asia, Skystar Capital, Sovereign Capital,
Gobi Partners
LinkAja Venture Round Undisclosed Mitsui & Co. Ltd
Lunash Seed Undisclosed Antler
Seeds Finance Seed Undisclosed Ruvento Ventures, Angel Investor
Wagely Series B $ 23,000,000 Capria Ventures
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16. Consolidation
for Business
Strengthening
Startup M&A
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17. List of M&A
There were no startup IPOs in Indonesia during 2023 likely
due to uncertain market conditions, cautious investor
sentiment, and the availability of private funding options.
Additionally, startups may have postponed IPO plans to focus
on strengthening their business fundamentals or navigating
regulatory challenges.
In light of this, M&A (Merger and Acquisition) emerged as a
significant strategy for consolidation among startups in
Indonesia in 2023. With the absence of IPOs, startups may
opt to merge with or be acquired by other companies to
streamline operations, expand market reach, and enhance
competitiveness. M&A allows startups to combine
resources, technologies, and expertise, fostering growth and
sustainability in a dynamic market landscape.
Additionally, M&A serves as a strategy for foreign players
to swiftly explore new markets in Indonesia, leveraging the
existing infrastructure and customer base of acquired
startups for instant market penetration.
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18. Summary & Conclusion
●The impact of the tech winter, is still relatively felt through Q1 2024.
Nevertheless, there has been an increase in the number and value of
funding compared to last year.
●Seed funding continued to dominate the number of transactions in Q1,
with the most considerable accumulated amount coming from debt
funding, totaling $144.3 million.
●Fintech, Agritech, Climate-Tech, Edtech, Legal-Tech, and SaaS were the
top sectors attracting investors during this period. Fintech has led in
startup funding for several years. Meanwhile, new sectors like
Climate-tech are emerging due to the increasing demand for tech
solutions to environmental problems.
●The top 10 largest funding deals were dominated by the fintech sector,
with Akulaku raising the highest amount through $100 million in debt
funding. This achievement marks a recovery in fintech funding
performance, which had experienced a significant decline in the
previous year.
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19. Authors & Researchers
19
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Amir Karimuddin
Senior Partner
Amir heads up the Investment team
in DS/X Ventures and the Research
and Consulting team in
Discovery/Shift. Amir and his team
publish reports and data about the
state of startups, enterprise, and
technology ecosystem in Indonesia
Prior to Discovery/Shift, he has
worked to various IT consulting
services and a tech media company.
He graduated in Computer Science
from the University of Indonesia.
Randi provides data and researches
in Discovery/Shift. With his 7 year of
experience in the tech and startup
industry, he successfully published
multiple reports and analytics in the
past couple of years.
Prior to Discovery/Shift, he worked in
an academic innovative research lab,
honing his skill in research and
development.
He graduated in Informatic
Engineering and Business
Administration from the Yogyakarta
Technology University and Flinders
University.
Randi Eka
Research & Investments
Wulan Pangestika
Research & Investments
Wulan provides as a researcher that
transforming data into actionable
insights. With her 5 years of
experience, specializing in the digital
industry and startups, she excels in
conducting multi-sectoral research
projects and collaborating with a
diverse range of stakeholders.
Prior to Discovery/Shift, she has
worked to various IT consulting
services and a tech media company.
She graduated in Computer Science
from the University of Indonesia.
Michael Cleavant
Head of Investments
Michael provides as an Investment
researcher to provide qualitative and
quantitative data. With his networks,
he excels in data acquisition and
collaboration with multi-industry
stakeholders.
Prior to Discovery/Shift, he has
worked to several financial
institutions and advisory company.
He graduated in Finance from the
Chinese University of Hong Kong,
Shenzhen [email protected] 2024-05-29 16:50
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20. We are a boutique research, consultancy
and advisory firm that specialize in digital
transformation and corporate innovation.
We combine our deep industry
knowledge, access and cutting edge
technical expertise to solve our clients’
most complex challenges.
Clear, rapid, and tailor-made solutions,
ranging from strategy development to
operations implementation.
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21. We help clients across the transformation and optimization
journey to achieve organisational objectives
Conducting a
thorough assessment
of the client’s:
Current technology
Infrastructure
Business processes
Strategic objectives.
Continuously monitor
their performance
against predefined
KPIs.
Initial
Assessment
Ideation &
Concept Building
Capacity
Building
Implementation &
Integration
Monitoring &
Improvement
Scalability &
Expansion
Develop innovative AI
solutions tailored to
the client’s specific
needs: Brainstorming
sessions Workshops
Collaborative idea
generation.
Assist in building the
necessary AI
capabilities: Setting up
the right team structure,
identifying skill gaps,
developing a talent
acquisition strategy.
Guide the integration of
AI technologies into
existing business
processes:
Deploying AI solutions,
Integration supervising
Connection other IT
systems
Aligning them with
business operations.
Evaluate the potential
for scaling successful
AI implementations to
other areas of the
business or enhancing
existing capabilities.
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22. DISCOVERY/SHIFT
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CONTACT US
Rahmat Harlyadi
Senior Partner
[email protected]
+62811.945.805
SINGAPORE
33 Ubi Avenue 3, #08-13 Vertex,
Singapore. 408868.
JAKARTA
Pacific Place Jakarta, Jl. Jend. Sudirman 52-53
Lv. 1, Unit 78, Jakarta, Indonesia. 12190 [email protected] 2024-05-29 16:50
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23. References
●https://dailysocial.id/research/startup-report-2023
●https://www.imf.org/en/Publications/WEO/Issues/2024/04/16/world-economic
-outlook-april-2024
●https://dealroom.co/uploaded/2024/04/Dealroom-South-East-Asia-Q1-2024-R
eport.pdf?x90202
●https://www.forbes.com/advisor/banking/cds/cd-rate-forecast/
●https://www.pwc.com/sg/en/financial-services/assets/venture-debt.pdf
23
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