Tracxn, a leading global SaaS-based market intelligence platform, has released its Indonesia Tech Semi-Annual Funding Report - H1 2023. The report, based on Tracxn’s extensive database, provides insights into the Indonesia Tech space.
Indonesia is the second largest economy in Southeast Asia, after Singapore and is also the second-highest funded startup ecosystem in Southeast Asia till date. Despite this, funding in the Indonesian tech startups in H1 2023 decreased by 73% when compared to the same period last year and 29% from H2 2022. This downward trend in funding is majorly due to rising interest rates, slower economic growth, declining consumer confidence, inflation and geopolitical tensions among others.
Companies in the Indonesia Tech space raised $597 million in H1 2023, as against $844 million in H2 2022 and $2.2 billion in H1 2022. The number of funding rounds in H1 2023, too, was 43% and 59% lower than the amounts raised in H2 2022 and H1 2022, respectively.
This slide is largely due to a massive 86% drop in early-stage investments, from $963 million in H1 2022 to $137 million in the first six months of 2023. Early-stage funding in H1 2023 was also 56% lower than $313 million raised in H2 2022. Seed-stage funding in H1 2023, too, fell 63% and 81% when compared with H2 2022 and H1 2022 respectively.
67% of the total funding this year was raised in Q1 2023 with $403 million being raised during the quarter, a decrease of 55% from Q1 2022. The second quarter of 2023 witnessed funding worth $194 million, a sharp 86% drop from Q2 2022.
In H1 2023, two funding rounds were higher than the $100 million, compared with one $100 million+ round in H2 2022. Both H1 2023 and H1 2022 witnessed only one new Unicorn, with eFishery becoming the latest company to cross the $1 billion valuation mark.
Six acquisitions were recorded in the first half of 2023, a significant change from 14 acquisitions in H1 2022 and 12 in H2 2022. Three companies from the Indonesia Tech space went public in H1 2023, as against none in H1 2022 and one in H2 2022.
FinTech, Food and Agriculture Tech, and Retail were the top-performing segments in H1 2023 in the Indonesia Tech startup ecosystem. FinTech companies accounted for the bulk (51.42%) of the overall investments attracted by Indonesian Tech companies. However, funding into FinTech companies fell 73% in H1 2023, compared with the same period last year. The decline can be attributed to the rising inflation and other economic factors. However, Indonesia has established itself as an emerging player in Southeast Asia's FinTech space, with more than 1,500 FinTech startups.
The Food and Agriculture Tech is the second-highest funded segment in Indonesia, the funding amount has declined by 74% compared to H1 of 2022. Among Indonesian cities, Jakarta took the lead in terms of funding. Startups based in Jakarta raised $378 million in H1 2023, followed by Bandung ($148 million) and Tangerang ($40.5 million).
East Ventures, init 6 and SMDV, were the most active investors in H1 2023 in this space. East Ventures, init 6, and 500 Global were the top seed investors, while SMDV, Gobi Partners, and Openspace Ventures were the top early-stage investors. SoftBank Vision Fund, DST Global, and Mirae Asset were the top late-stage investors
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