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VC industry hopes for market turnaround in second half of 2024
Venture capital firms suggest a possible rebound of Indonesia’s tech sector could begin later this year, though the first half of 2024 will likely remain under the shadows of the 2023 decline marked by mass layoffs and business closures.
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Trihill Capital founder Anthony Tjajadi (left), fintech firm Aspire general manager Ferdy Nandes (second left), Skystar Capital managing partner Abraham Hidayat (second right) and Intudo Ventures founding partner Patrick Yip pose for a picture after speaking at a discussion session titled Navigating the Future: Investment Outlook 2024 organized by Aspire and Trihill Capital at Indonesia Crowdfunding Exchange (ICX) in Jakarta on Jan. 11, 2024. (JP/Ruth Dea Juwita)
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enture capital firms suggest a possible rebound of Indonesia’s tech sector could begin later this year, though the first half of 2024 will likely remain in the shadows of the 2023 decline marked by mass layoffs and business closures.
“For the first half of this year, I think we'll still continue to see a lot of the unfortunate news that we've been reading these days,” Intudo Ventures founding partner Patrick Yip said on Thursday, characterizing 2024 as “a tale of two halves”.
The first half would remain turbulent, reflecting the hangover from the “exuberant times” of 2021-2022, suggested Patrick, whose firm has a focus on Indonesia. However, “more optimism” would come in the latter half should macroeconomic conditions and Indonesia’s upcoming elections unfold favorably.
Speaking at the discussion session Navigating the Future: Investment Outlook 2024 hosted by Aspire and Trihill Capital in Jakarta on Thursday, Patrick also observed a trend of “higher dilution” for start-ups arising from lower valuations across various funding rounds and stages in 2023. “There are probably about 125 funding deals in Indonesia in total, and we have seen a decline in rounds at various stages.”
“Valuations have also come down,” he pointed out. “This means that the [share] dilution sacrificed by founders is now much higher than before,” he explained, cautioning that “ownership is very important in early-stage funding,” because the exit potential would not be as high as before.
Read also: VC firms to keep focus on fundamentals but eye early-stage deals in 2024
While early-stage investment continued to drive growth in transaction volumes, the first half of 2023 only saw 110 deals compared with 344 in the second half of 2022, according to a report published by AC Ventures and Bain & Company in November 2023.
