Indonesia’s once-vibrant startup ecosystem endured a sharp contraction in 2024, with funding activity slowing to its lowest level in recent years. According to the Indonesia Tech Annual Report 2024 by Tracxn, the country’s total startup funding plummeted to US$323 million—a 75 per cent drop from the US$1.3 billion raised in 2023 and an even more pronounced 90.05 per cent fall from US$3.24 billion in 2022.
This dramatic downturn reflects broader global caution in venture capital (VC) spending, but also highlights local challenges unique to Southeast Asia’s largest economy. The most acute impact was felt at the late-stage level, where startups collectively raised just US$71.2 million. This figure marks a steep 91.95 per cent decrease from US$884 million in 2023 and a 95.84 per cent collapse from 2022’s US$1.71 billion.
Across the board, the Indonesian tech startup scene has encountered tightened capital flow. Early-stage and seed-stage startups have not been spared, signalling a systemic slowdown in the investment cycle. However, some pockets of resilience remain. According to the report, sectors such as fintech, enterprise applications, and insurtech have continued to attract investor attention, suggesting a selective appetite for scalable and financially sound business models.
Beyond private equity funding, exit activity also witnessed a decline. Only one startup, Topindoku, made its public debut in 2024, raising US$34.9 million. This singular IPO illustrates the cautious sentiment prevailing in capital markets, where companies are holding off on public listings amidst valuation corrections and investor scepticism.
As traditional venture funding continues to retract, startups are increasingly exploring alternative avenues for growth capital. One such option gaining traction is corporate venture capital (CVC), often backed by major corporates and financial institutions.
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The CVC advantage
In contrast to conventional VCs, CVCs not only provide financial backing but also offer strategic advantages, including access to customers, go-to-market support, and brand credibility.
A Harvard Business Review article underscores the potential of CVCs in volatile markets. It notes, “These corporate investors offer not only funding, but also access to resources such as subsidiaries that can serve as market validators and customers, marketing and development support, and a credible existing brand.”
In Indonesia, where startups are grappling with funding scarcity and the need to demonstrate value early, such support can be vital.
Banks, too, are stepping up as non-traditional partners, especially those seeking to expand their digital portfolios or strengthen relationships with innovative enterprises. With extensive regulatory experience and existing customer networks, banks can offer a solid foundation for collaboration, particularly in fintech and adjacent sectors.
Despite current headwinds, Indonesia’s tech ecosystem retains underlying strengths. With a young, tech-savvy population, growing internet penetration, and increasing digitisation across industries, the long-term fundamentals remain intact. Yet the current funding winter is a reminder that capital efficiency, strong unit economics, and clear product-market fit are more essential than ever.
Looking ahead, the trajectory of Indonesia’s startup ecosystem will depend on how founders, investors, and strategic partners adapt to this new normal. The rise of CVCs and institutional collaborators may redefine what it means to grow a tech startup in Indonesia—shifting the narrative from high-velocity growth to long-term resilience and strategic value creation.
To understand more about this shift, do not miss the fireside chat “Investing in Innovation: The Role of Banks and CVCs in the Future of Indonesia’s Tech Ecosystem” at Echelon Singapore 2025, taking place on Tuesday, June 10, from 11:00 AM to 11:30 AM at the Forge Stage.
This session offers a timely deep dive into how banks and corporate venture capital arms are stepping in to support innovation amid Indonesia’s shifting funding landscape. Moderated by Shilpa S Nath, Founder of What The Fail, and featuring Eddi Danusaputro, CEO of BNI Ventures, the conversation will explore new strategies for sustainable growth, the evolving role of institutional investors, and what it takes to build resilience in uncertain times.
Entry is free—make sure to attend and gain key insights into the future of tech investment in Southeast Asia.
Get your passes here.
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