Indonesia has emerged as a significant force in the global business scene in recent times, establishing itself as a prominent player not only within ASEAN but also on a broader scale, driven by a population exceeding 270 million and a rapidly expanding middle class. Supported by a government committed to fostering entrepreneurial endeavours, the region’s business environment is undergoing notable changes. Programmes like the 1000 Startup Digital Initiative and Indonesia Investment Fund demonstrate this commitment by setting ambitious goals to stimulate the establishment of new digital ventures.

Aligning with this growth trajectory witnessed by the regional tech startup landscape, Echelon X was recently held last May 15-16 at the Singapore EXPO, offering attendees access to a wide array of benefits. This includes access to valuable market insights, growth initiatives, a marketplace for digital solutions, programs facilitating market entry, enhanced brand reputation and visibility, and an opportunity for dynamic innovators from the region to come together, interact, and foster collaboration.

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Joining the many up-and-coming and established companies from across the global tech ecosystem in Echelon X is Telkomsel Ventures. Most notably, Telkomsel Ventures spearheaded a roundtable discussion on “Collaborative Innovation Models: Strategies for Effective Corporate-Startup Partnerships” which was attended by over 100 companies and organisations including WeWork, Invest Hong Kong, Vinova, TAPPI Global, and ArmourZero, among many others. Additionally, Mia Melinda, Telkomsel Ventures’ CEO, delivered a talk entitled, “Driving Impact: Corporate Venture Capital and the Future of Tech Innovation in Indonesia,” during a fireside chat moderated by Devina Mardiputri of e27.

Being the corporate venture arm of Telkomsel, Telkomsel Ventures invests in promising startups, helping them grow by leveraging Telkomsel’s extensive ecosystem, resources, and expertise. Complimenting their forecast on future trends, Telkomsel Ventures relies on visionary founders to reveal what lies ahead. Through the productive discussions, Telkomsel shared key insights regarding the important emerging trends in the region.

Indonesia’s burgeoning venture capital landscape

The financing landscape in Indonesia is diverse, mirroring the country’s rich diversity. Venture capital plays a prominent role, offering not just financial support but also strategic guidance and access to valuable networks essential for business expansion.

Both global giants like Sequoia Capital and local players such as East Ventures have made significant investments in promising Indonesian startups, covering a wide range of sectors from fintech to eCommerce.

Despite facing recent challenges following a boom in global venture capital funding in 2021 – 2022, Indonesia remains a beacon of hope in the regional venture capital scene. Favourable market conditions helped sustain VC deal values in Indonesia in 2022, holding steady compared to global markets which experienced declines of 20% to 40%. Moreover, there was a notable increase in deal volumes, particularly in early-stage opportunities, indicating growing investor interest. Another positive aspect is the diverse mix of international and local investors participating in the Indonesian VC market, with locally focused investors gaining a stronger foothold in recent years.

Exciting innovations in and out of Indonesia that venture builders are looking to support

Venture builders, also known as venture studios, company builders, or startup studios, are specialised entities that transform disruptive ideas into groundbreaking startups with commercial potential. While the concept of a venture builder is relatively novel, the idea of corporate spin-offs and the commercialisation of industry intellectual properties has been practised for a long time. For young start-ups, venture builders are seen as having lower risk and requiring less commitment. They are more adaptable and willing to pivot and reallocate resources among various projects, attracting entrepreneurs who wish to gain broader exposure to entrepreneurship rather than dedicating themselves to a single venture.

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Within Indonesia and the neighbouring regions, exciting opportunities have arisen from budding new ventures born out of new innovations. Southeast Asia’s technology startups are projected to achieve an impressive valuation of $1 trillion by 2025, a significant increase from $340 billion in 2020. Indonesia, the region’s largest e-commerce market, holds nearly half of the market share. 

Sharing about the hottest industry trends and development initiatives within Indonesia supported by Telkomsel Ventures, Mia Melinda emphasised, “For Telkomsel Ventures, we focus on aligning with our corporate needs through three pillars: digital lifestyles, digital enablement, and emerging technology. Although Telkomsel is a telecommunications company, we aim to provide more than just connectivity by offering additional value to our customers.”

Melinda added, “According to a global consultant’s recent survey, post-COVID, executives now prioritise building new businesses, with artificial intelligence being the top focus, followed by sustainability, and direct-to-consumer (D2C) strategies. While D2C saw a peak during the pandemic due to the need to maintain customer connections, it now ranks third in priority after AI and sustainability.”

Upcoming opportunities and challenges for Indonesia’s tech ecosystem

Foreseeing a captivating outlook for the region and Indonesia’s tech ecosystem, global tech giants have flocked to the region in search of new business opportunities. For instance, Microsoft has recently unveiled plans to invest US$1.7 billion over the next four years to enhance cloud and AI infrastructure in Indonesia. This investment will also include AI training opportunities for 840,000 individuals and support for the expanding developer community in the country. Nevertheless, there are also challenges that should be considered further to develop the technology-driven industries and venture capital community.

Sharing her thoughts on these topics, Mia Melinda expressed, “In terms of challenges, investing in innovations comes with a high degree of uncertainty, requiring thorough risk assessments and mitigations. Traditional methods, which rely on predicting the probability of risks in various criteria, often fall short when dealing with the unpredictable nature of new ventures. We need to embrace plural scenarios and conditional situations, acknowledging our limited knowledge and the inherent uncertainty in investment decisions.

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Furthermore, the governance process in corporate venture capital can be lengthy and complex. However, founders who seek strategic synergy with corporations are often willing to navigate this process, understanding the long-term benefits of having robust governance in place as their businesses grow and scale.  To help bolster our impacts in the tech landscape in the country, we also aim to foster better cultural integration between corporations and startups, promoting collaboration and positive cultural assimilation within the company.”

To learn more about Telkomsel Ventures and its projects, please visit its website: www.telkomsel.vc

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This article is produced by the e27 team, sponsored by Telkomsel Ventures

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