New Challenges and Promising Potentials for Indonesian Startups in 2023

GoTo (Gojek Tokopedia) was estimated to have provided an added value of IDR 349-428 trillion to the economy in 2022. This number is equivalent to 1.8-2.2% of Indonesia's national GDP.

Reflecting on this data, GoTo also contributed to reducing the poverty rate by 0.317 percentage points on average in districts and cities where they operate.

Accumulated at the national level, the impact of GoTo's existence is equivalent to removing more than twenty-four thousand people from poverty during 2015-2022.

It's a success story of startups in 2022, but how are GoTo and other startups doing in 2023?

Investors Reevaluating Standard, How Are Indonesia’s Startups Right Now?

Unfortunately, startups seem to be on a tight leash this year.

According to the SEA Asia Deal Review Q1 2023 report, funding to Indonesian startups fell by 41% quarter to quarter (QtQ) and 55% year on year (YoY).

Of the USD 2.08 billion given to Southeast Asia startups in the first quarter, Indonesia received a portion of 20.8%. Its value is estimated to be USD 432.64 million or around IDR 6.36 trillion.

Indonesia is not the only country struggling with funding.

Funding to Southeast Asia startups themselves fell by 25% QtQ and 52% YoY in the first quarter. The number of startup funding agreements also fell by 37% YoY to only 195 deals.

The Common Challenges Startups Need to Avoid in 2023

Co-founder and managing partner of venture capital firm TNB Aura, Charles Wong, sees the decline in funding as a reflection of investors' rising standards for startup companies in Southeast Asia. 

Investors are now closely monitoring how startups focus on developing their business models. In addition, investors also hope that startup founders can better understand their company operations and the market segments they are targeting.

CEO of MDI Ventures, Donald Wihardja, believes that if startups are no longer getting funding, then they must try hard to capture more markets. Moreover, currently, investors are more interested in startup companies that are profitable and have the potential to last a long time in the industry.

Therefore, according to Gulf Business, startups need to pay attention to these things in 2023:

• Don't get swept away by the convenience of new technology. Instead, focus on creating and using products with ethics and empathy.
• Avoid a premature product launch. Make sure your products are something users will be ready to pay for.
• Focus on one thing at a time and make sure you do it well. Stick to one simple value proposition until you're successful at it.
• Consider your company culture. While respecting different opinions is a good thing, it's also important to make sure your team has the same purpose and direction.

Potential: Top Start-Ups Which Are Growing in 2023

Even though funding has dwindled, it doesn't mean that Indonesian startups are no longer attracting investors' eyes.

Ango Ventures, a venture capital fund that raises money from Japanese and Indonesian investors, is reported to have injected capital into Jojonomic, a business management startup.

Although they did not mention the investment value they provided, Ango Ventures claimed that Jojonomic has great potential to transform and make an impact in various industrial sectors in Indonesia.

The Jojonomic management platform itself offers convenience in managing a business through HR, productivity, sales, finance, operations, and data intelligence services embedded with NoCode technology.

Meanwhile, looking at the ride-hailing sector, GoTo is said to have experienced a gross transaction value increase of 68% Yoy to IDR 360.4 trillion. Their gross income rose 43% to IDR 1.7 trillion.

Throughout 2023, GoTo Financial is planning to increase its loan book and make consumer lending the main drive of its fintech business unit monetization. Last August, Gojek itself launched GoPaylater on Tokopedia.

Surplus Indonesia, an alumnus of the SSI (Startup Studio Indonesia) mentoring and startup program, also managed to secure early-stage funding from Salam Pacific Indonesia Lines (SPIL) Ventures at the beginning of the year.

Thanks to this injection of funds, Surplus Indonesia was able to expand its operational reach to Jabodetabek, Bandung, Yogyakarta, Surabaya, Malang, and Bali. Their total active application users currently reach 10,000 people.

Needless to say, 2023 will be the make-or-break year of many startups in Indonesia. Their biggest challenge is to penetrate more markets and raise enough cash to fund their operations. However, if these startups can get through 2023 with minimal investment funds, there is a big chance they will last longer in the industry.

Need help in navigating around Indonesian startups? Get in touch with us, or directly register as a client and be connected with our expert network Indonesia with over one thousand advisors in FMCG (18%), Fintech (12.5%), Retailers (11.3%), and many more!