Indonesia 1,000 Startups Movement


Indonesia launched government-backed initiative called “1,000 Startup Movement” with the goal to grow 1,000 startups until 2020. They will together value approximately $10 billion US but unfortunately, the movement does not have any monetary support from the government.

From June to September, the movement will start in Jakarta, Yogyakarta and Surabaya, then move onto other cities such as Bandung and Malang. The initiative will consist of workshops, hackathons, boot camps and incubation programs but still perceived as an ambitious target,

Consider that from the 1,000 startups, only a fraction will survive (the rule of thumb often cited is that 90 percent of startups eventually fail).

The goal is to have 200 startups across 10 cities emerge from the funnel each year, which would amount to 1,000 startups by the end of 2020. Each startup would need to reach a valuation of $100 million to survive in the long term. This is extremely ambitious, as Indonesia has only produced a handful of companies that might have reached unicorn status, such as C2C marketplace Tokopedia.

The government is endorsing this program, but it is not providing monetary support.

By 2017, the movement will focus on Denpasar, Medan and a few others. Indonesia’s Ministry of Communication and Information Technology will be collaborating with tech ecosystem builder, Kibar. This means that Kibar will have gather all the support from event organizers and startup mentors, including investors to sustain this initiative.

Initiative but no endorsement, what now?

Regardless, it is still vital for the ecommerce ecosystem to have a government-backed initiative. Small businesses and tech initiatives benefit from exposure and training sessions supplied through workshops and incubators but without seed funding or cash flow, initiatives will remain just that. Budget allocations should be given to get the startups off the ground.


A version of this appeared in Tech in Asia on June 22. Read the full article here.

thailand-hubba-startup, Thai Government's Efforts In Seeding Startups

Source: Tech in Asia, Hubba

The Thai Government announced a 20 Billion THB investment to accelerate 2,500 existing startups, with a target to increase the number to 10,000 by 2018. The government’s efforts in seeding startups will be a very important one, but they must ensure the program’s effectiveness and transparency. According to Pumin Yuvacharuskul, CEO at Eatigo,

Thailand’s ecommerce landscape is held back by unfavorable cross border investment policies and limited talent pool, which means that the government should roll out initiatives to sustain and grow start-ups as well as getting it off the ground.

Thai laws limit foreigners to holding 49% of the shares in an ecommerce business, as opposed to Singapore’s 100%. Law also states that the company needs to hire four Thai people to one foreigner. In order for Southeast Asia’s ecommerce landscape to flourish, opening up the market would help foster the local economy.  Indonesia has taken initiative and currently the Investment Coordinating Board (BKPM) is finalizing guidelines that will allow 100% foreign ownership of an ecommerce business with a minimum investment of US$8 million, or businesses that create 1,000 employment opportunities. In China, the government has poured a lot of money into startups and there are well established tax and tech-park incentives.

Governments can help create incentives for banks to support funding to help startups that have potential, and not only to SMEsAlthough this is a good initiative for a growing digital economy, it will take a long time to see results if local and international VCs are not involved in seed funding. Opportunities for  regional collaborations will also boost business. Recently, The governments of Thailand and Singapore announced a partnership to promote digital start-ups and mentoring for existing startups.

“Several drawbacks for startups operating in Southeast Asia are the limitations on users and monetisation given the combination of low GDP per capita and low credit card penetration in the region,” said Eddie Thai, a venture partner with the early-stage VC firm 500 Startups. “These challenges will be overcome with time in most countries, but it will be hard for any country to match Singapore, let alone Silicon Valley, without overcoming infrastructure and corruption issues.”

A version of this appeared in Bangkok Post on June 20. Read the full article here.