Unlocking Indonesia’s digital opportunity
The digital native vertical in Indonesia presents a burgeoning opportunity for IT vendors. The sheer size of the country’s population shows great promise to its growing consumer market, which is consuming digital rapidly.
Over 420 million people in Southeast Asia (“SEA”) are internet users, and out of that, 50.1% come from Indonesia (a whopping 273.5 million users). To date, over 2,500 active start-ups serve the digital natives in Indonesia.[i]
According to Boston Consulting Group and Cisco, Indonesia’s IT spending is expected to grow at a 13% CAGR over the following years and reach USD 6billion by 2024.[ii] COVID-19 prompted local enterprises to digitalise their operations, and this drove the demand for cloud-related services. Indonesia is well-poised to lead Southeast Asia in IT spending to become the region’s 2nd largest public cloud market.
The digital ecosystem in Indonesia is more robust, attributable to the rising internet penetration rates, which accompanied significant improvements in the country’s digital infrastructure.
Indonesian DNBs – Hotbeds for venture capital (“VC”) investments
VC activity has been bustling in Southeast Asia, and SEA digital natives raised a whopping USD 11.7billion in H12021. Indonesia displayed impressive numbers by clinching 70% of the capital invested in SEA[iii] – it accounted for 85 out of the 442 deals captured. On the other hand, Indonesia-based VC firms also raised a total of USD 582million of capital venture fund in 2019 – a 79% growth from USD 325million in 2018.[iv]
Our DNB picks
Given the vibrancy and potential of Indonesia’s digital native business (“DNB”) scene, we certainly faced difficulties in selecting these 20 businesses. However, the bullishness we have towards the performance of these start-ups and their potential growth led us to narrow down the selection criteria eventually.
We considered these factors in selecting the 20 rising DNBs in Indonesia:
- A promising business model covers three defining traits – technology intelligence, revenue model, and the addressable market. The trio indicates the DNB’s scalability for innovation according to the market landscape, the sustainable revenue stream from the target market, and the ability to leverage technology to collect data across the value chain to iterate its products/services
- Ability to attract funding – Total funding of at least USD 20million, as it shows the belief investors have in the DNB. VC investors have a higher likelihood to invest in DNBs which have a sizeable market pool, strong competitive advantage, and a strong management team
- Participates in the value chain of a thriving industry – The DNBs are operating within leading verticals of fintech, e-Commerce, healthtech, logistics and edutech. These 5 industries are accounted for 84% of the USD 11.7billion raised by SEA DNBs in H12021.
List of 20 emerging Indonesian DNBs
| Sicepat Vertical: Logistics – Supply Chain Tech Total Funding: USD 238.5mil Revenue: USD 316mil Year: 2014 Solution: Sicepat specialises in last-mile delivery, warehousing, and fulfillment and middle-mile logistics. The company’s service offerings include freight forwarding, warehousing, parcel couriers, consignment and delivery services, enabling customers and clients to avail of the timely movement of shipments. It has a goal to empower SMEs. |
| Ruangguru Vertical: Edtech Total Funding: USD 212.5mil Revenue: USD 448mil Year: 2014 Solution: Ruangguru is the developer of an e-learning platform providing access to educational material. The platform connects private tutors with students in Indonesia and helps students learn through interactive quizzes and infographics. |
| Halodoc Vertical: HealthTech – Digital Health Total Funding: USD 185.0mil Revenue: <USD 5mil Year: 2016 Solution: Halodoc is the developer of a digital healthcare platform designed to simplify access to healthcare by connecting patients with doctors. This telemedicine facilitates online consultations and simplifies the consultation process. |
| Sociolla Vertical: e-Commerce – Internet Retail Total Funding: USD 166.6mil Revenue: USD 52mil Year: 2014 Solution: Sociolla is the developer of an online shopping platform intended to provide beauty products. The company’s platform offers a range of products – such as lip gloss, serum, lipstick, eyeshadow palette, hair oil, face masks, and perfumes. The platform envisions providing better products and convenience to women in Indonesia. |
| GudangAda Vertical: e-Commerce Total Funding: USD 135.9mil Revenue: USD 29mil Year: 2019 Solution: Gudang Ada is the operator of a B2B marketplace intended to connect traders in the fast-moving consumer goods supply chain. The company’s marketplace helps users meet and transact online and facilitates both small and bulk transactions between users. |
| Akulaku Vertical: Fintech Total Funding: USD 130mil Revenue: USD 274mil (H12021) Year: 2014 Solution: Akulaku is a banking and digital finance platform aiming to provide financial services to the underserved. Some of its key offerings are digital banking, consumer credit, and digital investment services. |
| Ula Vertical: Business Productivity Software – Supply Chain Tech Total Funding: USD 117.5mil Revenue: USD 29mil Year: 2019 Solution: Ula is the developer of a retail marketplace platform intended to organise the sourcing and supply chain procedures. The company’s e-Commerce marketplace helps store owners stock only the inventory they need and grants them working capital, thereby offering users the tools to conduct their business seamlessly and profitably. Jeff Bezos invested in Ula through his family office, Bezos Expeditions. |
| Bibit Vertical: Fintech – Wealthtech Total Funding: USD 110.0mil Revenue: n/a Year: 2016 Solution: Bibit is the developer of a robo-investment platform, investing on the user’s behalf based on their risk appetites. |
| HappyFresh Vertical: Foodtech Total Funding: USD 102mil Revenue: USD 13mil Year: 2014 Solution: HappyFresh is an online grocery platform for clients to get their groceries delivered to their doorstep. The company’s personal shoppers pick out quality and fresh produce while the riders complete the last-mile delivery to one’s doorstep. |
| LinkAja Vertical: Fintech – Consumer Finance Total Funding: USD 100mil Revenue: n/a Year: 2019 Solution: LinkAja is the developer and operator of a mobile payment platform designed to facilitate smoother financial transactions. The company’s platform is an integrated e-wallet service focusing on meeting people’s essential needs. It enables the Indonesian government to encourage an increase in financial inclusion and aids the success of the National Non-Cash Movement. |
| TaniHub Vertical: e-Commerce- Agtech Total Funding: USD 92.5mil Revenue: n/a Year: 2016 Solution: Tanihub is a B2B agritech platform that facilitates transactions between farmers and their customers. TaniHub’s couriers and third-party logistics providers would later deliver these orders to the customers. |
| Sirclo Vertical: e-Commerce Total Funding: USD 91.83mil Revenue: USD 15mil Year: 2013 Solution: Sirclo is the developer of a website building platform designed to create a comprehensive e-Commerce service that can facilitate online sales. The company’s platform focuses on creating a professional template-based website that facilitates online transactions and end-to-end e-Commerce management and communication tools. |
| Shipper Vertical: e-Commerce– Logistics Total Funding: USD 82.93mil Revenue: USD 39.2mil Year: 2016 Solution: Shipper is the developer of an e-Commerce logistics platform that helps online vendors in the fulfillment process and in tracking orders. Shipper offers a pick-up service performed by couriers, helping sellers get orders to their buyers. |
| BukuWarung Vertical: Fintech – Payments Total Funding: 77.5mil Revenue: 5mil Year: 2019 Solution: BukuWarung is a fintech start-up for MSMEs, providing solutions for bookkeeping, digital payments and e-Commerce. Its bespoke solutions cater towards the needs of MSMEs, helping them take their business online. |
| PayFazz Vertical: Fintech – Payments Total Funding: USD 74.52mil Revenue: USD 22mil Year: 2016 Solution: PayFazz is the developer of a financial platform designed to offer a payment alternative to the unbanked who live in rural areas. The company’s financial platform coordinates with banks to create a distributed network of bank agents and offers secure payments and management of money, giving Indonesians more access to financial services. |
| AloDokter Vertical: Healthtech Total Funding: USD 45.1mil Revenue: USD 19mil Year: 2014 Solution: AloDokter is a healthcare information platform that offers quality content and interactions with qualified Indonesian doctors. The platform connects doctors, hospitals and clinics to patients, educating people on health subjects. |
| Aruna Vertical: e-Commerce- Agtech Total Funding: USD 40.5mil Revenue: USD 21mil Year: 2015 Solution: Aruna is the operator of an integrated fishery platform intended to connect small-scale fishermen to the global market. The company collects real-time data directly from local fishermen, connects them directly to B2B markets, and offers seafood supply and market insights, enabling fishery sectors to streamline and enhance trading. |
| Mekari Vertical: HR Tech Total Funding: USD 33.4mil Revenue: n/a Year: 2018 Solution: Meraki is the operator of a Software-as-a-Service (SaaS) company intended to facilitate human resources, accounting, and taxes. The company offers multiple software that manages specific business areas in accordance with the applicable regulations. It also automates administrative matters so that businesses can focus on more strategic matters. |
| Cermati Vertical: e-Commerce Total Funding: USD 26.9mil Revenue: USD 6mil Year: 2015 Solution: Cermati is the operator of a financial e-Commerce platform designed to provide accessible and easy-to-use financial products for Indonesians. Some of the services offered to clients are that of the facilitation of the customer onboarding process. |
| Rarali Vertical: e-Commerce Total Funding: USD 22.0mil Revenue: n/a Year: 2013 Solution: Rarali is the developer of a full-stack online platform designed to connect and provide solutions for businesses. It provides a marketplace for users to find their desired financial products easily. |
twimbit’s takeaways – Are you seeding the opportunities?
Indonesia is a hotbed for start-ups with a vibrant economy and a digital ecosystem ripe with potential for further growth. Demand for the unique value propositions of these DNBs would further propel them to success in the coming years.
We believe that these up-and-coming DNBs possess great potential to rise to the stage and be on par with the more mature, established start-ups.
Ready to talk?
Leave a comment or email us at reachus@twimbit.com with your interest.
[i] SEA Cloud Economy Report (2021, October 14). twimbit. https://twimbit.com/insights/sea-cloud-economy/
[ii] Indonesia poised to be fastest growing APAC market in IT spending this year (2021, September 1). iTNews Asia. https://www.itnews.asia/news/indonesia-poised-to-be-fastest-growing-apac-market-in-it-spending-this-year-569278
[iii] Indonesia retains its position as SE Asia’s second-largest venture capital market (2020, March 27). The Jakarta Post. https://www.thejakartapost.com/news/2020/03/27/indonesia-retains-its-position-as-se-asias-second-largest-venture-capital-market.html.
[iv] Southeast Asia Tech Startups Ride Out 2020, Raising $8.2 Billion (2021, march 26). Bloomberg. https://www.bloomberg.com/news/articles/2021-03-26/southeast-asia-tech-startups-ride-out-2020-raising-8-2-billion