President Joko “Jokowi” Widodo has plans for Indonesia’s startup ecosystem to become “The Digital Energy of Asia”, an ambition he shared during his visit to Silicon Valley, reports Jakarta Globe.
The Ministry of Communications and Information has now joined hands with KIBAR, a local startup incubator company to create 1,000 digital startups worth $10 billion by 2020. The program will be rolled out in ten cities: Jakarta, Bandung, Surabaya, Yogyakarta, Semarang, Malang, Medan, Denpasar, Makassar and Pontianak.
The government want to help startups begin their venture – namely funding; strong capital often makes or breaks a startup. These are the four startups with the most funding in 2015:
1. Matahari Mall
Indonesian ecommerce giant Mataharimall.com reportedly received $500 million in 2015 from holding company Lippo Group, a local conglomerate who owns Matahari department store, one of the country’s largest offline retailers. The company has set a target to become a driving force in the Indonesian ecommerce scene and rival Alibaba and Rakuten.
The company is eyeing $1 billion in sales within two years. Last year, the company appointed Hadi Wenas as CEO of Matahari Mall.
This is one of Indonesia’s oldest ecommerce ventures. The company secured $22 million in extra funding in November from Ideosource, a local venture capaital which also invested in online media companies.
The investment has pushed Bhinneka.com closer to an eventual IPO in 2018, a major milestone for a company that started off as a computer supplier in 1995. Its online migration happened almost accidentally, brought on by the 1998 economic crisis which forced the company to cut overheads and start selling its products on the internet.
The company booked a triple-digit growth in sales last year, as it added a marketplace service to its webstore with 2,600 merchants using the service along with offices in Jakarta, Surabaya, Medan, Makassar and Bandung.
Online grocery store Happyfresh earned $12 million in funding last year from Vertex Ventures, Singapore’s oldest venture capital firm and a division of the island country’s state investor Temasek Holdings and Sinar Mas Digital Ventures.
Happyfresh has big ambitions to turn the company into one of the largest food-tech groups in Asia. The Jakarta-based startup already has overseas presence in Taiwan, Malaysia, Thailand and the Philippines. Happyfresh was launched in 2014 in Indonesia and Malaysia.
The Jakarta-based food delivery startup received $8 million in 2015 from Richmond Global Ventures, a US-based venture capital which has aggressively invested in startups in China, India and other emerging markets, as well as Gobi Partners.
The money was used to expand its services in several cities such as Java and Bandung.
Out of the large startup scene in Indonesia, only a handful of them were able to secure a substantial amount of funding. This could suggest that the government’s 1,000 startups initiative may be a challenge. The problem is not usually with initial funding, but the amount of capital each startup will require to develop and expand.
A version of this appeared in Jakarta Globe on July 25. Read the full version here.