The article was first published on September 7, 2022. To read about the latest update on the rising popularity of QRIS and e-payment in Indonesia, please refer to this opinion piece. 

Earlier this month, after years of isolation in Singapore due to the pandemic, I finally returned to my home country Indonesia for some work-related matters. My first visit was to Denpasar and Jakarta in June, followed by another one in late August to attend the NXC International Summit.

There are many things about the trips that shook me to the core. But the biggest shock was how much things have changed since I left.

When I started working at e27 as a junior writer in 2015, one of the most popular topics was the country’s dependency on cash and hesitation to embrace digital payments. But everyone I know seems to have a Jenius or Bank Jago app installed on their smartphone; you would also struggle to find an Indonesian who had never used GoPay to pay for anything in their life. The use of QR code for payments have also become familiarised through initiatives such as the QR Code Indonesian Standard (QRIS).

Indonesia also has more unicorns than ever, and these second-generation unicorns are unlike their predecessors. In addition to working in different verticals, these companies are also more open to the idea of international expansion. As if this is not shocking enough, most of them were also born at the height of the COVID-19 pandemic.

These changes alone were enough to convince me that the Indonesian startup ecosystem has changed. But apparently, the transformation runs deeper than that.

So, what is new in Indonesia?

Plenty of things, really. One of the most noticeable is that the Indonesian government seems to be more startup-friendly than before –at the very least, they are showing a supportive gesture towards the community.

Also Read: Accelerating Indonesia’s rural economy through social commerce

We saw this a few years ago when leading startup founders entered public service by becoming executives at state-owned enterprises, presidential special staff, and even a minister. Not all of these stories have a happy ending, as you may have guessed. Some founders ended up being involved in scandals and becoming public enemies on social media.

But from the government side, there seems to be an acknowledgement of the important role that the local startup ecosystem can play in building the economy, which is in line with changes in the direction that Indonesia is taking in general.

In his presentation on the last day of the NXC International Summit, Coordinating Minister of Maritime and Investment Affairs Luhut Binsar Pandjaitan explained how Indonesia intended to transform its economy to be more efficient, resilient, industrialised, and less dependent on commodities. There are several steps that the government is taking to achieve this, but downstreaming industries and digital transformation are some of the relevant ones to our topic today.

Beyond the government and their policies, I also noticed a wider variety of investors coming into the market. Back in 2017, investors from China were all the rage –I remembered attending media luncheons hosted by some of them, announcing their plans to invest in the market. This year, at NXC International Summit, the Kingdom of Saudi Arabia and Indonesia announced a joint fund to further support the startup ecosystem in the growth journey. For Indonesian startups looking to fundraise (and perhaps enter new, promising market) there are more options available than before.

Another change that I witness is the shift of tech hubs in Indonesia. Back then, the game was all about Jakarta and Jogjakarta –many leading tech companies seem to have at least an office in this city, thanks to its affordable cost and availability of young talents. But today, Bali seems to appear with a fresh face as an upcoming tech hub in Indonesia.

While the province was home to pioneering tech companies such as Tokobagus, lately, we have begun to see it cementing its position as a mecca for crypto enthusiasts.

I asked a Bali-based friend if the use and knowledge of crypto is widespread outside of the ex-pat and tech community in Bali, and her answer was yes. “These people are introducing crypto to their drivers, and so on,” my friend said. “So, at the very least, the locals are aware of it. It is not limited to just one community.”

Also Read: How SWAP Energy aims to promote EV use in Indonesia through the advantages of battery-swapping

How will this affect the future?

Before we can answer that question, the first thing we need to acknowledge is that the Indonesian startup ecosystem has reached a level of maturity. It is becoming a market where startups and the tech solutions that they provide are welcomed; they are even able to start making money from it. Indonesian customers are becoming even more tech-savvy and are finally ready to welcome the next forms of innovation in the market.

This means there are even more opportunities in the market for both startups and investors.

For startups originating from Indonesia, the influx of foreign investors, especially from countries that may have never paid attention to Indonesian startups before, provides new avenues to fundraise and expand into new markets. This is also good news for startups in neighbouring countries; while expanding into a new market will always be challenging, rest assured the Indonesian market today is more receptive to innovation than before.

For investors, this means a whole different array of opportunities. In the current climate, early-stage startup investments might be The Thing, but the rise of soonicorns and unicorns in the market also provides its own unique avenue for later-stage investors.

In the end, back in 2016, I wrote about how my ancestors would roll in their graves every time a startup nonchalantly said they are going to expand to Indonesia. This time, I am confident they can finally rest in peace.

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The post The Indonesian startup ecosystem today is no longer recognisable –and that is a great thing appeared first on e27.