1、IndonesiaVenture CapitalReport 2023November 2023Indonesia Venture Capital Report 20232Copyright 2023 AC Ventures and Bain&Company,Inc.All rights reserved.Adrian Li is Founder and Managing Partner at AC VenturesSamira Shihab(samiraacv.vc)Leighton Cosseboom(leightonacv.vc)Tay Yan Xin(yan-)Soegeng Wibo

2、wo()Melina Anlin is VP of Investment at AC VenturesRyan Evans Vennanddi is a member of Investment team at AC VenturesTom Kidd is Partner at Bain&CompanySoegeng Wibowo is Partner atBain&CompanyLee Meng Yang is Senior Manager atBain&CompanyAngelo Wijaya is a member of ValueCreation team at AC Ventures

3、Authors and acknowledgmentsKey ContactsMedia QueriesThis work is based on secondary market research,analysis of financial information available or provided to AC Ventures and Bain&Company,as well as a range of interviews with industry participants.AC Ventures and Bain&Company have not independently

4、verified any such information provided or available and make no representation or warranty,express or implied,that such information is accurate or complete.Outlooks and financial information,analyses,and conclusions contained herein are based on the information described above and on AC Ventures and

5、 Bain&Companys judgment,and should not be construed as definitive forecasts or guarantees of future performance or results.The information and analysis herein do not constitute advice of any kind,are not intended to be used for investment purposes,and neither AC Ventures and Bain&Company nor any of

6、its subsidiaries or their respective officers,directors,shareholders,employees,or agents accept any responsibility or liability with respect to the use of or reliance on any information or analysis contained in this document.This work is copyright AC Ventures and Bain&Company and may not be publishe

7、d,transmitted,broadcast,copied,reproduced,or reprinted in whole or in part without the explicit written permission of AC Ventures and Bain&Company.Table of Contents4710152326Executive summaryIndonesia macroeconomic contextIndonesia VC deals landscapeKey investment themes in 20222023Investor base and

8、 fund-raisingPerspectives on exits landscape1235629Key shifts in the start-up ecosystem over 2023312023+look ahead33Glossary784PagePagePagePagePagePagePagePagePageAC Ventures|Bain&Company3Venture Capital investment in Indonesia has moderated over the past year or so to a more measured,sustainable pa

9、ce as compared to 2020-21,which was anunusual period.Startups are now expected to meet or even exceed their targeted milestones before VCs will consider them for subsequent fund raisings.This should form the basis for a healthierstartup ecosystem where founders focus on building products that custom

10、ersactually want,creatingdurable business models and executing with a high degree of capital efficiency.Carlson LauManaging Director,Northstar Group1Executive summaryThe past 12+months have seen a reset in the Indonesian venture capital(VC)industry,with investors adjusting the pace,scale,and focus o

11、f capital deployment in the face of market uncertainty.Following a boom in 2021 that extended into the first half of 2022,capital deployment began to slow in the back half of 2022 as investors reacted to a deteriorating global macro environment driven by geopolitical tensions,rapidly rising interest

12、 rates and weaker consumer and business sentiment.Focus on deployment was further muted as capital allocators moved resources to portfolio support.This trend has continued in 2023,with data through August 2023 indicating that the Indonesian capital market will experience a 70%to 80%decline in deal v

13、alue this year vs.2022.Investors have also adjusted their filters for appropriate investments they are funding(in line with public equities as well as VCs in other regions).Generally,investors have sought lower valuation multiples,stronger unit economics and ability for companies to reach break even

14、.This trend can be seen in the worsening conversion rate from seed funding to Series A and Series B funding.As a result,there is pressure on start-ups to pivot from a growth-at-all-costs mentality to a focus on capital efficiency andprofitability.Despite these challenges,Indonesia remains a bright s

15、pot in the regional VC landscape.Attractive marketfundamentals helped overall VC deal value in Indonesia hold up reasonably well in 2022(flat year over year)vs.other markets globally(20%to 40%declines).Deal volumes also climbed around 20%year over year in 2022 as investors increased focus on early-s

16、tage opportunities.Indonesia Venture Capital Report 202343AC Ventures|Bain&Company5Currently,in Indonesias tech startup ecosystem,secondary exits are prevailing over IPOs as the dominant exit strategy.In Indonesia,the occurrence of IPOs remains limited,reflecting the globallandscape where IPOsaccoun

17、t for only about 10%of VC exits globally.Movingforward,it appears thatsecondary exits will continue to be a common exit strategy for the foreseeable future,while the potential growth of IPOs remains to be seen.Donald WihardjaCEO,MDI VenturesA series of structural factors have helped support this rel

18、ative resilience:(a)macro fundamentals in the country remain stable,and the country continues to have the most promising demographic tailwinds of any ASEAN economy;(b)the digital economy continues to expand,withconsumer and SME adoption growing steadily.Another attractive aspect of the Indonesian VC

19、 market is the diverse set of international and local investors deploying capital in the market.In particular,venture investors with Indonesia as their primary mandate have taken a growing share of deal flow in the country,mostly focusing on early-stage deals and deals under$50 million.These locally

20、 focused investors have emerged with a strong foothold in the market.Their share of deal value grew from around 3%in 2018 to 14%and 16%in 2022 and 2023 respectively.They have also been able to raise larger amounts in successive funds,indicating a good investment track record from earlier vintages.As

21、suming the quality of start-ups backed by these investors do not deteriorate,there will be a healthy pipeline of mid-and late-stageopportunities from their portfolio in the next three to five years.One area of the Indonesian start-upecosystem that remains nascent is exits.Given the relatively small

22、scale of the market,exits have been lumpy and largely skewed toward strategic trade sales.In recent years(2021 onwards),initial public offerings(IPOs)have seen a pickup,largely caused by exits of e-commerce and mobility players Blibli,GoTo,and Bukalapak.It remains to be seen if start-ups can sustain

23、 this momentum,given increasing focus on profitability track records in the public markets.The next important step for these public big tech companies is to reach breakeven and generate cash flow in the near future.When these companies are able to produce cash flow,they may be able to create additio

24、nal channels for exits by fueling their growth through inorganic ways.On the regulatory front,the Indonesian government has balanced adopting a business-friendly posture(e.g.,strengthened digital infrastructure,facilitative policies on Indonesia Stock Exchange IDX listing)with protecting consumer an

25、d small business interests(e.g.,recent social-commerce ban,stricter privacy regulations on fintechs).6Indonesia Venture Capital Report 2023Indonesia will still continue to be a significant force for investors looking to Southeast Asia.It is very hard as an investor to look into Southeast Asia,while

26、ignoring Indonesia.We will continue to see a lot of interest,not just locally from an investment point of view,but also from a regional and global perspective.Gary KhoengPartner,Vertex VenturesSoutheast Asia and IndiaIn the future,a more resilient venture ecosystem is likely to emerge asstakeholders

27、 remain optimistic for long term prospects coupled with attractive asset prices.Here are several trends that may gain traction:Early-stage deals will likely stayprominent,especially in emerging sectors such as EV and energy(including the broader climate tech),consumer,healthcare and agritech.Growth

28、and later-stage start-ups will prioritize profitability and cashconservation to ensure a longer runway.This shift is influenced by investor demands for quality metrics,such as profitability,over mere top-line metrics.However many will continue to struggle with valuation overhangs.Those which are wel

29、l capitalized will seekopportunistic acquisition targets that help bring in synergistic products,markets and talent but likely only for distressed deals.The consolidation of digitalinfrastructure,through platforms like QRIS,SatuSehat,and the electronic national ID card,will pave the way for tech com

30、panies to further disrupt the national economy using digital tools.The local tech talent pool of“second generation founders,”or people who previously held leadership positions in first generation start-ups,will continue to grow and create their own start-ups.There will be a heightened focus on envir

31、onmental,social,and governance(ESG),both in terms of investment interest in the ESG space,aligned with a growing trend of new climate funds raised,as well as stronger emphasis on corporate governance in start-ups.Overall,the outlook for the Indonesian VC market is bright.The market growthfundamental

32、s remain intact,there is a clear pipeline of opportunities in emerging sectors,and there is a maturing investor base ready to provide capital to those companies.Together with a greater readiness of both the consumer and SME to adopt digital platforms for consumption and productivity andcontinued dow

33、nward asset pricing pressure is likely to create conditions for strong vintage of venture investment for newly deploying investors.Indonesia has a notably young population,arapidly increasingconsumption capacity,and positive trends in terms of GDP per capita growth.These factors are contributing to

34、thepotential demand for technology and business investments in the future,and will continue to place the country as an engine of growth.Steve PatuwoPartner,SV Investment2Indonesia macroeconomic contextIndonesia is seen as a bright spot today,given strong fundamentals and structural drivers.Indonesia

35、s economy is supported by its young population and burgeoning middle class,creating headroom forconsumption.The countrys GDP per capita growth reached 4.6%in 2022,one of the highest in the Association of Southeast Asian Nations(ASEAN)region,while the nations household consumption as a percentage of

36、GDP is at a healthy rate of about 55.6%,modestly surpassing ASEANs average of 51.5%and Chinas 38.1%.At the same time,Indonesias digital economy has seen rapid expansion,growing from$41 billion in 2019 to$77 billion in 2022,the highest in ASEAN.Urban digital users in the country had an 89%e-commerce

37、adoption rate in 2022,with the population spending an average of 8.6 hours daily online.Favorable macroeconomic tailwinds and policies have also supported Indonesias economy.Inflation is abating faster than market predictions,thanks to a trade surplus and government policies encouraging USD to IDR r

38、epatriation.This deceleration allowed Bank Indonesia to moderate its monetary stance,holding the central bank rate steady at 5.75%since January 2023.This stable rate helps to stimulate the economy and bolster the Rupiah against global fluctuations.Household consumption growth increased to 4.54%year

39、on year in the first quarter of 2023,in line with the rise in mobility(due to the lifting of pandemic restrictions)and the strengthening of purchasing power,coupled with lower inflation.Indonesia also maintained a positive trade surplus trend,where across 2022,the surplus trend reached$54.46 billion

40、,rising from$35.34 billion across 2021.Foreign investment hit a record$43 billion in 2022,a 44%uplift from 2021.Including domestic contributions,total investments reached$80 billion,marking a 34%increase from the prior year.The Indonesian capital market closed 2022 with a positive performance,with t

41、he JCI increasing 4.09%from 2021.This outperformed the MSCI EmergingMarkets Index,which declined by 20.09%over the same period.7AC Ventures|Bain&CompanyIndonesia is seen as a bright spot todayDespite Indonesias current positive economic landscape,several factors may requireIndonesia to navigate thro

42、ugh macro headwinds moving forward.The ongoing tensions between the United States and China continue to drive investor caution,requiring Indonesia to navigate an uncertain geopolitical environment with judicious moves.The upcoming 2024 elections may bring uncertainty,potentially slowinginvestment as

43、 stakeholders become cautious and adopt a wait-and-see approach.Major tech players such as GoTo and Grab,as well as smaller and midsize tech companies,continue to lay off employees this year due to increased pressure to achieve profitability,among other reasons.Certain sectors of the economy,includi

44、ng e-commerce space,remain dynamic,following the recent restrictions on TikTok Shop in September 2023.8Indonesia Venture Capital Report 20231 Note:Middle class is defined as the segment of the population in each country withannual income between$1,500 and$5,000.This number only includes the populati

45、on aged 15 and above.Source:The ASEAN Secretariat(2021).Source:Euromonitor International(2023),AC Ventures analysis.Source:The World Bank(2023).Source:The World Bank(2023),2021 data.Population aged 20-54(%)Middle class population(M)9AC Ventures|Bain&CompanyDigital economy is rapidly growing across S

46、EA,including in Indonesia(1)Only considers urban digital users(2)The average amount of time each day that internet users aged 16-64 spend across different kinds of media&devices.Note:SEA stands for Southeast Asia.GMV stands for gross merchandise value.Source:DataReportal,e-Conomy SEA Research 2022.1

47、0Indonesia Venture Capital Report 2023During 2021-2022,there was an unusual increase in venture activities such as rapid investments,new companies being formed,and faster pace offundraising.However,this spike seems more like an exception rather than a lasting trend.Looking ahead,it is expected that

48、the venture ecosystem will“normalize”and experience a steadier pace of growth,and the best companies will be focusing on fundamentals and tapping into the rising demand potential in the market.Susli LiePartner,Monks Hill Ventures3Indonesia VC deals landscapeIn the midst of a volatile global VCenviro

49、nment,Indonesias ventureecosystem,from 2021 to 2022,displayed remarkable resilience,maintaining a steady deal funding amount at$3.6 billion(flat year over year for 2021 to 2022)despite 20%to 40%declines in other regions,such as the United States,China,and India,as well as globally.However,an evident

50、 increase in investor caution emerged from the second half of 2022 to the first half of 2023,marked by a reduced number of deals and a noticeable decline in deal sizes.The funding pace in 2023 has lingered at a slow rate through the third quarter.Although there is a slight uptick in deal value for t

51、he third quarter of 2023,it only stands at 0.3 times compared to the same quarter in the previous year.Large and medium-large deals,exceeding$50 million,saw a significant drop in volume from the second half of 2022 to 2023 YTD,with 72%of the rounds happening within 2022 to 2023 YTD closed in the fir

52、st half of 2022 before the wider macro headwinds notably affected the pace of capitaldeployment.In contrast,deal activity within small deals($10M)saw healthy growth over 2021,and these deals remain the most resilient in 2023,indicating steady early-stage momentum.This growth is further emphasized by

53、 a significant increase in early-stage deals,mainly driven by a surge in seed fundings,reaching a historic high.However,Series B fundings experienced a downturn,shrinking in both the number of deals and average value per deal.Series C and D+deals,though limited in number,have risen in terms of both

54、deal count and average value.11AC Ventures|Bain&CompanyIndonesia investments overviewIndonesia VC investments maintained steady growth in 2022 despite globalmacroeconomic headwinds due to pandemic recoverymomentum.Compared to other regions,Indonesias VC investments maintained a steady level year on

55、year at$3.6B.With a 5.31%GDP growth in 2022 and stable political anddemographic factors,Indonesia presents a resilient andattractive market for VCinvestments.Indonesias VC funding from 2021 to 2022 remained a stable anchor while other regions faced slowdownsDeal flow picked up quickly in 2021;growth

56、 rate declined in 2022 as investors got increasingly cautiousAnnual VC investments in Indonesia($M)Overview of global VC investments($B)Note:VC refers to Venture Capital.Source:Crunchbase.Note:VC refers to Venture Capital.Source:Crunchbase;Bank Indonesia(2023).12Indonesia Venture Capital Report 2023

57、Indonesia investments overviewStrong momentum growth over to Q2 2022 despite early head-winds becoming visible(e.g.,rising interest rates,geopolitical tensions).Increasing investor caution over H2 2022 to H1 2023 evident by a lower number of deals vs H1 2022 and compressed deal sizes both indicates

58、a material clampdown on the overall funding landscape.Funding in 2023 has remained sluggish up to Q3 2023.While there has been an increase in Q3 2023,it remains only 0.3xcompared to Q3 2022.Deal flow slowed down over H2 2022 and H1 2023Average deal size has been lower in last 4-5 years compared to 2

59、016-2018 Annual VC investments in Indonesia($M),split by quarterNote:VC refers to Venture Capital;The data for Q3 2023 is current up to August 2023.Source:Crunchbase.Note:VC refers to Venture Capital;The data for Q3 2023 is current up to August 2023;YTD refers to Year to Date as of August 2023.Sourc

60、e:Crunchbase.Number of VC deals in IndonesiaAverage VC deal size in Indonesia($M)13AC Ventures|Bain&CompanyProportion of medium and large ticket size deals dropped significantly in 2023Megarounds in the last three years are typically seen in marketplaces,fintech,and logistics sectorsNumber of VC dea

61、ls in Indonesia(split by size of deal)Large deals of$50M+dropped significantly in volume over H2 2022 to 2023 YTD as 72%of rounds happening within 2022 to 2023 YTD closed in H1 2022 before broader macro headwinds had ademonstrable effect on pace of capital deployment.Deal activity within small deals

62、($10M)saw healthy growth over 2021,and these deals remain the most resilient in 2023,indicating steady early-stage momentum.Note:VC refers to Venture Capital;Ticket size indicates total investment value in respective rounds(inclusive of all investors).The data for 2023 is current up to August 31,202

63、3.Source:Crunchbase.Cumulative VC investments in Indonesia from 2021-2023 YTD($B,split by size of deal)Overview of large-ticket-size deals with$100M+fundingNot ExhaustiveNote:VC refers to Venture Capital;The data for 2023 is current up to August 31,2023;B2C refers to Business-to-Consumer.Source:Crun

64、chbase.14Indonesia Venture Capital Report 2023Early-stage seed deals are flourishing,while early growth stage saw a slumpNote:VC refers to Venture Capital;Series D+includes series D to series E.Source:Crunchbase.Indonesia still in its early years in creating unicorns Source:Bain India Venture Capita

65、l Report 2023,CB Insights(2023),literature search.Source:Bain India Venture Capital Report 2023,CB Insights(2023),literature search.Early stage deals significantly increase,caused by uplift in seed fundings reaching historical high.Series C and D+deals,although small in number,rose in terms of numbe

66、r of deals and average value per deal.Series B fundings see a slump,contracting in terms of number of deals and average value per deal.0.7xNumber of new unicornsTotal number of unicorns created to date(2007-2022)Globally,new unicorns declined from 540 to 220 across 202122The Indonesian VC investment

67、 landscape has evolved through three distinct phases.The first phase(before 2020)saw investors primarily investing into platform businesses with network effects,particularly those with winner-takes-all characteristics.The key sectors during this period weree-commerce,mobility and logistics,and finte

68、ch(e-wallets,payments,etc.).This second phase(2020 to 2022)marked a shift in investment priorities as investors targeted sectors that directly benefited from Covid-induced movement restrictions and a global surge in investing interest.The popular sectors during this phase included e-commerce,fintech

69、(with a particular interest in buy now pay later,lending,and wealth platforms),and a short-livedinterest in Web3 technologies.The current(2023 onwards)trend ininvestments leans towards ESG and climate tech,particularly electric vehicles(EVs)and battery technologies.Health-tech remains robust in acon

70、servative deal climate,and there is an upswing in digitally native,direct-to-consumer(D2C)brands maximizing the influence of e-commerce platforms and social media tools.4Key investment themes in 20222023Investment sectors inIndonesia are expected to continue along current trends.However,new developm

71、ents might emerge in sectors like healthcare,driven by specific regulatory changes.Additionally,with the rise of foundational ArtificialIntelligence(AI)technologies,we could see a surge inapplied AI use cases across the country.Despitechallenges in the ecosystem,the primary strengths ofIndonesias in

72、vestmentsectors are rooted inconsumer and financialservices.Gary KhoengPartner,Vertex VenturesSoutheast Asia and IndiaAC Ventures|Bain&Company15A few emerging investment themes include the following:Consumer tech investments witnessed a significant dip from around$580 million in the first half of 20

73、22 to around$81 million in the first half of 2023.Nonetheless,the investor sentiment seems positive,buoyed by Indonesias burgeoning middle class and vast working population.Financial services investmentsplummeted from over$1 billion in the first half of 2022 to around$25 million in the first half of

74、 2023.The investments in financial services in the first half of 2023 predominantly catered to insurtech,rural banking,and mortgages.EV and energy saw a significant increase in investments,from around$3 million in the first half of 2022 to around$18 million in the first half of 2023.Additionally,a$3

75、8 million investment in Maka Motors during the second half of 2023 brought the total 2023 YTD investment in this space to$56 million.This uptick is partially driven by supportive government initiatives,including policies and regulations as well as subsidies for retail customers.The consumer mindset

76、is gravitating towards EVs,facilitated by more affordable financing options when compared to ICE vehicles.Mobility titans like Grab and GoTo,having extensive networks of drivers and vehicle fleets,have initiated collaborations with EV brands such as Electrum.This shift garners support from extensive

77、 interest across related sectors,such as charging infrastructures and original equipment manufacturers.Investments in agritech saw a significant relative increase in 2023 YTD,with aqua-culture alone showing 1.2 times growth from the first half of 2022 to the first half of 2023.A significant highligh

78、t was the hefty$200 million investment in eFishery.The health-tech sector experienced a substantial boost,with investments jumping from$8 million in the first half of 2022 to$51 million in the first half of 2023.Halodocs Series D funding round alone secured$100 million,raising the total 2023 YTD inv

79、estment to$151 million.Firstly,the consumer sector in Indonesia is poised for the next phase of hyper growth,fueled by rising income levels and consumers willingness to try new products.This growth will be supported by more mature logistics and online payment systems,which should catalyze the emerge

80、nce of new brands.Secondly,despite historical reluctance towards newtechnologies in Indonesiasagriculture sector,successstories such as eFishery offer a glimpse of how the seamless integration of tech into atraditional workflow can help a business model scale massively.This playbook is now beingrepl

81、icated by other startups in Indonesia.Lastly,the MSME sector remains a vast but yet under-penetrated field.Founders are building new,innovative software solutions to help MSMEs drive operational efficiency.We see emerging opportunities in thedigitalization of supply chains,incorporation of AI agents

82、 into external customer and internal employee facing workflows and utilization of AI to facilitate better decision making and business planning.Carlson LauManaging Director,Northstar Group16Indonesia Venture Capital Report 202317AC Ventures|Bain&CompanyInvestors appear to increasingly focus on new t

83、hemes such as EV,energy,and healthcareAnnual VC investments in Indonesia($B,split by sectors)(1)Number of deals displayed is the number of all deals in each year,including those without known valueNotes:This graph only includes pre-seed,seed,series A to E,and other select venture funding.EV stands f

84、or Electric Vehicles.VC stands for Venture Capital.N/A stands for Not Applicable.B2C stands for Business-to-Consumer.ESG stands for Environmental,Social and Governance.SaaS stands for Software as a service.B2B stands for Business-to-Business.The data for 2023 is current up to August 31,2023.Source:C

85、runchbase,S&P Capital IQ,Preqin,AVCJ,literature search.Annual VC investments in Indonesia(Number of deals,split by sectors)Notes:This graph includes all deals,regardless of whether their value is known.The data for 2023 is current up to August 31,2023.Source:Crunchbase,CapIQ,Preqin,AVCJ,literature s

86、earch.18Indonesia Venture Capital Report 2023Series B and onwards funding rounds tend to see higher share of Financial Services dealsAnnual VC investments in Indonesia(201823 YTD)(Number of deals,split by sector and deal stage)Notes:This graph includes all deals,regardless of whether their value is

87、known.Source:Crunchbase,CapIQ,Preqin,AVCJ,literature search.Investors shift sector focus in 2023;bright spots observed in EV and energy,food and agriculture sectorsNotes:Sector deal size(size of bubble)based on 2022 aggregate values;sectors with low N,low aggregate deal sizes,or outlier data exclude

88、d.EV stands for Electric Vehicles.VC stands for Venture Capital.Source:Crunchbase,S&P Capital IQ,Preqin,AVCJ,literature search.Growth in average VC deal value(2021-22)Growth in average VC deal value(H1 22-H1 23)Sectors such as biotech,energy,EV,and cleantech are poised forcontinued growth,making Ind

89、onesia an increasingly attractive destination for investments.The marketsappetite,coupled with a broader industry shift towards sustainability and a green economy,will further fuel expansion in these areas.Other businesses that transcend basic models by incorporating AIinnovations operational AI and

90、 other pivotal technologies or those possessing unique intellectualproperties(IPs)with substantial growth potential,carve unique,defensible niches in their markets,making them particularly enticing for investors.Steve PatuwoPartner,SV InvestmentAC Ventures|Bain&Company19Indonesia Venture Capital Rep

91、ort 202320Sector deep dive:Consumer sectorNotes:VC stands for Venture Capital.YTD stands for Year to date.F&B stands for food and beverage.KOL stands for Key Opinion Leader.B2C stands for Business-to-Consumer.Source:Crunchbase.Sectoral Deep DiveSector deep dive:Financial servicesNotes:VC stands for

92、Venture Capital.YTD stands for year to date.Source:Crunchbase.Sectoral Deep Dive3AC Ventures|Bain&Company21Sector deep dive:EV and energyNotes:EV stands for electric vehicles.VC stands for Venture Capital.YTD stands for year to date.ICE stands for internal combustion engine.GTM stands for Go-to-Mark

93、et.TKDN stands for Tingkat Komponen Dalam Negeri.Source:Crunchbase,literature search.Sector deep dive:Agri-techNotes:VC stands for venture capital,YTD stands for year to date.N/A stands for not applicable.B2B stands for business-to-business.D2C stands for direct-to-consumer.Source:Crunchbase,literat

94、ure search.Sectoral Deep DiveIndonesia Venture Capital Report 202322Sector deep dive:Health-techNotes:VC stands for venture capital,YTD stands for year to date.SEA stands for Southeast Asia.BPJS stands for Badan Penyelenggara Jaminan Sosial.Source:Crunchbase,literature search.3 3AC Ventures|Bain&Com

95、pany23The investor landscape in Indonesia is highly fragmented and sees participation from multiple investor profiles,including global VCs,global crossover growthinvestors,sovereign wealth funds,corporate VCs,SEA-centric VCs,andIndonesia-centric VCs.There is an established cohort of VCs with Indones

96、ia as their main mandate that have a young but credible track record(defined as at least 25 deals participation since 2018),especially in early-stage deals.Over the years,deal share of theseIndonesia-centric VCs has grown rapidly from around 3%of deal value share in 2018 to around 14%of deal value s

97、hare in 2022.In addition,there is growing traction in fund-raising by these Indonesia-centric VCs,with larger amounts raised insuccessive fund vintages.The majority of deals invested by these prominent Indonesia-centric VCs have been on earlier stages(seed and Series A),with ticket sizes typically b

98、elow$50 million.Taken altogether,this would suggest a healthy pipeline of companies for mid-and late stage rounds in the next three to five years,as companies backed by these Indonesia-centric VC investors seek follow-on funding.5Investor base and fund-raisingIn contrast to many other countries,Indo

99、nesia boasts substantial domesticinvestment in tech startups,with large localconglomerates pouringhundreds of millions of dollars into the tech sector byanchoring many large local VCs.In other countries,only smaller funds are typically raised locally,and larger,later-stage funds are sourced globally

100、.Unlike in othercountries,Indonesia seessignificant investments from domestic sources in its tech startups.Donald WihardjaCEO,MDI VenturesIndonesia Venture Capital Report 202324Investors with Indonesia as main mandate have increased their share of deal flow over the yearsAnnual VC investments in Ind

101、onesia($B,split by fund managers)3%8%10%15%14%16%Increasingly more funding has been raised by VC investors that participate in Indonesia over the years(1)Defined based on last 6 years deal activity(at least 25 deals participation since 2018;deals with known value);excludes accelerators;in multi-inve

102、stor deals,deal value per investor is assumed to be equally split.Note:VC stands for Venture Capital.Source:AVCJ,literature search.(1)Fund managers that raised 25 deals in Indonesia since 2018 have largely focused on early-stage dealsVC deals1 by select investors2 in 202122(split by deal size)325The

103、 maturity of local capital markets plays a significant role in determining whether they can support a successful venture exit,through either public or private markets.In a region like Southeast Asia,we are beginning to see larger tech startups developing their capabilities in executing M&As,with com

104、panies such as GoTo,Grab,and Traveloka undertaking acquisitions and honing their skills to support inorganic growth.The viability of M&As as an exit route in the region,and particularly in Indonesia,still needs to be validated,but this is to be expected given how nascent the venture ecosystem still

105、is,only a decade in.In fact,I hope to see the maturation of a spectrum of exit pathways as time goes by.Susli LiePartner,Monks Hill VenturesExits in Indonesia have traditionally been lumpy,and they have typically been done via trade sale to strategic buyers.IPOs have seen a greater share in 2021 to

106、2022 due to listings of select scale consumer tech companies(i.e.,Bukalapak,GoTo,and Blibli)on IDX.In the future,pressures on marketcapitalization of publicly listed companies that participate in SEA and Indonesia tech ecosystem(e.g.,SEA group,GoTo,Grab,Bukalapak)will likely dampen further mega-IPOs

107、 of Indonesian tech companies.In addition,the funding environment post 2022 has gotten tougher,as evidenced by worsening conversion rate of follow-on funding.This implies that start-ups today will need to be more capital-efficient and have a track record on profitability and operations to meet more

108、stringent investor requirements.6Perspectives on exits landscapeIndonesia Venture Capital Report 202326AC Ventures|Bain&Company27(1)Exits with undisclosed deal amounts have not been included.Notes:Analysis only includes Indonesia-based issuer or target.PE stands for private equity.VC stands for vent

109、ure capital.YTD stands for year to date.IPO stands for initial public offering.Source:AVCJ,Preqin.Exits are lumpy and are mostly via trade sale;IPO channel gaining relevance in recent yearsValue of PE/VC exits1 in Indonesia(in$B,split by mode of exit)(1)Exits with undisclosed deal amounts have not b

110、een included;(2)Non-exhaustive;(3)For IPO exits,based on funds raised at IPO.Note:IPO stands for initial public offering.Source:AVCJ,Lit.search.Exits of tech investments have largely been via strategic trade sale,but IPO has increased in recent yearsProceeds raised at exit1($B,2018 onward)Select exi

111、ts in recent yearsNote:Each stage of funding only counted once per company,even if start-up has had multiple rounds of a single funding stage.Series B tends to happen 34 years after seed;Excluded 2021 cohorts onwards from analysisSource:Crunchbase,literature search.Emerging signs of a tougher fundin

112、g environment post 20202022 are indicated by worsening conversion ratePercentage of deals that garnered follow-on fundingCohort year defined as year that start-up received first round of preSeries A fundingAs funding environment becomes tougher,start-ups will need to be more capital-efficient and sh

113、ow a track record on profitability and operationsIn Indonesias venture capital scene,M&A activities are projected to surge due to the inherent fragmentation of various industry sectors withinIndonesia.Traditional business entities are likely to leverage M&A as a strategy to digitalize and innovate w

114、ithout the necessity of investingmassively in technology development.Meanwhile,despite prevailing skepticism among retail investors,IPOs retain their viability and allure.For a tech IPO to resonate with investors and achieve success,it is imperative for companies to demonstrate substantial revenue p

115、otential coupled with sustainable,healthy margins.IPOs in Indonesia remain promising,as it continues to be an influential force in the ASEAN landscape.As the market continues to mature and attract a diverse spectrum of both institutional and retail investors,the prospect of IPOs solidifies,emphasizi

116、ng itssignificant potential as an exit strategy for startups.Gabriella ThohirVenture Partner,Skystar CapitalIndonesia Venture Capital Report 20232829The past year has been a year ofreadjustments,with several apparent shifts in the start-up ecosystem.There is a pivot among investors from focusing on

117、aggressive growth toemphasizing sustainable unit economics.As investors grow more cautious,there is an increased focus on quality metrics over mere top-line metrics and a cleartrajectory toward profitability.This has led investors to execute more rigorous due diligence on their portfolios and to ado

118、pt a more conservative approach in valuing start-ups.7Key shifts in the start-up ecosystemover 2023Other than a more prudent valuation,another shift in the startup investmentecosystem is that investors are putting more emphasis on portfolio management and value creation.Investment strategies are evo

119、lving to offer more than just capital by providingstartups with strategicguidance and essentialbusiness introductions to foster their growth anddevelopment.Gabriella ThohirVenture Partner,Skystar CapitalAC Ventures|Bain&CompanyVenture debt has also gained prominence as the demand for non-dilutive fi

120、nancing is becoming more preferred among start-ups.Furthermore,there is anaccumulated reserve of undeployed capital,or“dry powder,”from funds raised in 2021 to 2022 as deployment in the first half of 2023 has been subdued.Another notable trend has been theestablishment of climate funds by VC firms,e

121、nhancing ESG investing.This reflects a broader shift towards ESG investing and an intensified scrutiny on ESG metrics,especially governance,in light of the recent governance issues among SEA start-ups.On the regulatory front,the government has bolstered personal data protection laws,introducing stri

122、ngent privacy rules.These enhanced regulations could impact various sectors,including fintech and e-commerce,by adding complexities to their data collection and processingprocedures.In September 2023,a new regulation was issued,barring social media platforms from operating as e-commerce platforms,po

123、tentially affecting D2C brand start-ups utilizing social commerce for sales.Nonetheless,structural macro enablers continue to bolster the start-up ecosystem.Recent initiatives such as the launch of the Indonesia Carbon Exchange(IDXCarbon),ongoing support from IDX and the Financial Services Authority

124、 to expedite start-ups IPOs,and IDXs decision to recognize dual-class shares and create a New Economy Board,are noteworthy.IDXs exploration into dual listing possibilities for Indonesian companies and the governments continuous efforts to enhance digital infrastructure also continue to propel the ec

125、osystem forward.Start-ups,on the other hand,haveencountered challenges such as layoffs to conserve capital,down rounds,corporate governance issues,and deferred IPOs.Despite these challenges,there are bright spots that highlight the maturation ofIndonesias start-up ecosystem.These include the IPOs of

126、 tech companies like GoTo and Blibli,the emergence of new unicorns like DANA and eFishery,and the rise of second generation foundersindividuals who previously worked at tech start-ups and bring with them tested entrepreneurial skills and perspectives.Indonesia Venture Capital Report 2023303AC Ventur

127、es|Bain&Company82023+look ahead31Moving forward,a more resilient ecosystem will likely emerge as stakeholders remain cautiously optimistic.Here are several key trends that will likely gain traction:Early-stage deals will likely stayprominent,especially in emerging sectors such as EV and energy(inclu

128、ding the broader ESG),healthcare,food,and agriculture.Meanwhile,fintech,commerce,and MSMEs(micro,small,and medium enterprises)enablement are set to remain attractive investment areas.Late-stage start-ups will lean towards prioritizing profitability and conserving cash to ensure a longer runway.This

129、shift is influenced by investor demands for a clear path to profitability and forsustainable unit economics.The favorable exit landscape isexemplified by the recent IPOs ofBukalapak and Blibli.Their potential for breakeven and positive cash flow will elevate investor confidence and enhance listing o

130、pportunities both locally and globally.Further bolstering this confidence are the current efforts by the government,through IDX,to enable younger companies to go public.Additionally,investors are closelywatching the ongoing discussions between IDX and foreign exchanges,aimed at enabling dual listing

131、s for Indonesian firms.The consolidation of digitalinfrastructure,through platforms like QRIS,Satu Sehat,and the electronic national ID card,will pave the way for tech companies to further disrupt the national economy using digital tools.The digital economy is projected to hit$360 billion by 2030.Th

132、e recent launch of the Indonesia carbon exchange(IDXCarbon)signals Indonesias commitment to net-zero goals,while at the same time signaling its regulatory infrastructurepreparedness,which investors willcontinue to closely watch.In the long run,global investors are expected to maintain a positive out

133、look on Indonesia,as underlyingfundamentals continue to provide new economic opportunities.Indonesia Venture Capital Report 202332The current climate for investing in early stage companies inIndonesia is one of the mostcompelling times that we have seen in the past ten years.Moving forward,we expect

134、 more M&A activities,with larger start-ups acquiring smaller teams in the ecosystem.This will enable an additional channel for exits and help fuel the investment and liquidity cycle for investors down the road.Additionally,the listing of major tech companies in Indonesia marks an important milestone

135、 in the past decade.VC-backed,digitally-enabled companies have managed to achieve multi-billion dollar market capitalizations,listing and raising public equity capital even during the toughest market cycles.When you are investing inIndonesia,you are investing for the coming decades,whereIndonesia wi

136、ll see an increase in GDP per capita,and continued growth of young and working population.In the coming years,the size of Indonesias digital economy could reach up to$360 billion,and many sectors of the economy will continue to be attractive for digital disruptions.Adrian LiFounder and Managing Part

137、ner,AC Ventures3AC Ventures|Bain&CompanyGlossaryDefinition of Indonesia VC used in the reportInvestment deal stages used in the report33GlossaryIndonesia Venture Capital Report 202334Select terms used in the report3AC Ventures|Bain&CompanyGlossaryList of select funds raised 2022-202335AC Ventures|Ba

138、in&CompanyNon-exhaustiveSource:Tech in Asia.Note:The cut-off date of the data is August 31,2023.Select funds include VC firms that have invested in Indonesias early and growth stage startups in 2022-2023.36AC Ventures(ACV)is a top Southeast Asian venture capital firm that invests in early-stage star

139、tups focused on Indonesia and ASEAN,with over US$500 million in assets under management.The firms mission is to empowerentrepreneurs with more than just capital by combining operational experience,industry knowledge,deep local networks,and resources.ACVs team has invested in over 120 tech companies

140、in the region since 2012.With a team of more than 35 professionals led by Adrian Li,Michael Soerijadji,Helen Wong,and Pandu Sjahrir,it has offices in Jakarta and Singapore.Visit our website at www.acv.vcOperating in 65 cities across 40 countries,they collaborate with their clients as a unified team,

141、aiming to achieve remarkable results,surpass competitors,and transform industries.Their specialized expertise is enriched by a dynamic ecosystem of digital pioneers,ensuring efficient,lasting outcomes.Their decade-long commitment to invest over US$1 billion in pro bono services offers their skill an

142、d insight to organizations addressing pressing challenges in education,racial equity,social justice,and more.They received a platinum rating from EcoVadis,a top platform for global supply chain ratings,placing them in the elite 1%of companies.Founded in 1973,theirsuccess is gauged by their clientsac

143、hievements,and they consistently uphold the pinnacle of client advocacy in their sector.For more information,visit Bold ideas.Bold teams.Extraordinary results.Bain&Company is a global consultancy that helps the worlds most ambitious change makers define the future.Indonesia Venture Capital Report 20

144、23www.acv.vcJakarta:Prosperity Tower lv.37,District 8,SCBD Lot 28,Jl.Jend Sudirman Kavling 52-53,Jakarta(12190)IndonesiaSingapore:The Great Room,Centennial Tower,3 Temasek Ave#18,17-28,Singapore(039190)Jakarta:Sequis Tower,Level 19,Suite 3,Jl.Jenderal Sudirman No.Kav.71,Jakarta(12190),IndonesiaSingapore:South Beach Tower,38 Beach Rd,level 15 South Beach Tower,Singapore(189767)