Indonesia’s startup ecosystem is navigating turbulent times as equity dealmaking has now been decelerating for 11 quarters on the trot, according to data from the recent DealStreetAsia DATA VANTAGE report Mapping SEA & Indonesia’s 2024 Journey.
In the fourth quarter of 2024 (Q4 2024), Indonesian startups recorded a mere 13 deals—the lowest quarterly deal volume in over six years—continuing a slide that started in Q2 2022. They raised a combined $59.2 million, the second lowest in at least six years.
This capped the full-year performance at 85 equity funding rounds, down 34% from the previous year. Total deal value in 2024, meanwhile, fell by 66% year-on-year to $437.8 million, making it the biggest contraction among the six largest Southeast Asian venture capital markets last year.
The report, released on Jan. 16 during the Indonesia PE-VC Summit 2025, attributes the prolonged decline in funding in Indonesia to structural challenges faced by homegrown startups, a shrinking middle class, slow industrialisation, and the high cost of doing business.
Source: DATA VANTAGEIndonesia’s contribution to overall funding in Southeast Asia has gradually declined in the past three years. It ended 2024 with a 9.6% share of regional deal value, steadily contracting from 40.3% in 2021, 22% in 2022, and 16.3% in 2023.
Correction across all stages
While Indonesia’s equity funding downturn has been across deal stages, late-stage deals have experienced a sharper contraction, mirroring regional trends.
Late-stage investments in Indonesia—Series C and beyond—reached a historic high in 2021, with 33 deals valued at $7.51 billion. By 2024, this plummeted to just four deals raising a mere $71.2 million, marking the weakest performance in both deal volume and value in over six years.
The scarcity of late-stage capital is evident across Southeast Asia, which recorded only 21 late-stage deals in 2024, raising a total of $1.23 billion—the region’s lowest level in over six years.
Deal sizes in Indonesia in 2024 were dominated by the lowest bracket, with transactions up to $1 million accounting for 30% of total activity. Deals in the $2.5-5 million range followed, representing 21% of overall deal volume. Notably, no deal exceeded $100 million in Indonesia last year—a stark contrast from two such deals in 2023 and seven in 2022.
With the lack of late-stage funding and continued pressure on startup valuations, Indonesia failed to produce a startup unicorn for the first time in six years. The most recent addition to the country’s unicorn roster was aquaculture firm eFishery, which surpassed $1 billion in valuation after securing a $200 million Series D round in 2023, becoming Indonesia’s 13th unicorn.
Alleged fraud activities in eFishery, which was exposed by DealStreetAsia recently, are poised to reduce the company’s valuation significantly.
Fintech overtakes e-commerce
E-commerce—traditionally the top sector in Indonesia—recorded only six deals worth $34.6 million. This is a sharp departure from 2021 when Indonesian e-commerce startups had sealed 47 equity rounds. It subsequently fell to 41 in 2022 and 22 in 2023.
The report highlights that the realignment in Indonesia’s e-commerce sector is driven by macroeconomic pressures, including a contracting middle class and rising inflation in first- and second-tier cities. These challenges are compounded by internal sector dynamics as established players face difficulties in demonstrating sustainable business models.
The decline in e-commerce deals pushed agritech up to second rank by deal volume in 2024. There were 12 agritech startups that raised funds in 2024, a slight improvement from 10 deals in 2023, but lower than 22 in 2022.
With the governance in eFishery under the spotlight, investors’ scrutiny of Indonesian agritech is likely to intensify. The same can be said for local fintech lending companies following the licence termination of SME-focused Investree and the dismissal of CEO Adrian Gunadi due to fraud allegations.
Cautious outlook
Investors remain cautiously optimistic about the potential recovery in Indonesia. While recent failures and governance crises in the startup scene have raised concerns, investors see this as an opportunity to showcase better quality of startups.
Patrick Walujo, co-founder and co-managing partner of Northstar Group expressed optimism about the country’s long-term prospects. He highlighted that Indonesia’s large market size, abundant natural resources, and growing consumer base make it “too big to ignore” for investors and tech companies.
“There are always bad apples, but if you put that aside, a lot of companies are doing extremely well, and that’s the difference. It is all about the quality of founders and the management,” Walujo said at the Indonesia PE-VC Summit on Jan. 16.
At the event, Pandu Sjahrir, Managing Partner of Indies Capital Partners, highlighted energy transition as the most exciting theme in Indonesia’s tech ecosystem for 2024. Sjahrir also serves as Vice President Director of PT TBS Energi Utama Tbk, which has partnered with tech giant GoTo to produce electric two-wheelers, underscoring his commitment to advancing this agenda.
In an interview for the DATA VANTAGE report, Intudo Ventures founding partner Patrick Yip said Indonesia “will remain off-the-radar” for many investors as a non-consensus market recovering from its first significant fundraising downturn.
“With anticipation around US capital markets reaching a feverish pitch, we expect capital to flow heavily into Wall Street and Silicon Valley, leaving emerging markets like Indonesia overlooked, but giving the Indonesia venture market in particular enough time to complete its recalibration of valuations and expectations for the next cycle,” Yip said.
The Mapping SEA & Indonesia’s 2024 report is available to DealStreetAsia Premium Plus subscribers.
