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Start-up funding to slow in second half: Venture capitals
At least 31 funding agreements were announced in the second quarter this year, higher than the 24 deals over the same period last year, according to DailySocial.id data.
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Funding for Indonesian start-ups will likely decrease in the third and fourth quarters of the year as investors look to profitable companies that are able to adapt to the pandemic, venture capitalists have projected. (Shutterstock.com/fatmawati achmad zaenuri)
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unding for Indonesian start-ups will likely decrease in the third and fourth quarters of the year as investors look to profitable companies that are able to adapt to the pandemic, venture capitalists have projected.
The projection is based on data that shows funding in this year’s first six months has mostly gone to seed-stage companies.
“We expect to continue seeing funding for companies in the third and fourth quarters – most of these companies will likely fall into the ‘for growth’ category with a clear path to profitability,” said Monk’s Hill Ventures cofounder and managing partner Peng T. Ong in an email interview on July 29.
Going forward, he went on to say, greater investment would go to companies that had benefited from the crisis, such as collaboration tool and e-commerce platforms, as well as companies that supported these companies, such as recruitment firms or logistics businesses.
Read also: Indonesian start-ups enjoy wave of funding, investment despite sluggish economy
A recent survey by Mobile Marketing Association (MMA) and SurveySensum revealed that e-commerce and fast-moving consumer goods (FMCG) players in several Asian countries, including Indonesia, expressed optimism that their business would recover quicker than other sectors after the pandemic. They expected business to return to normal within five months, around a month earlier than the 6.2 months expected by other sectors.
The COVID-19 pandemic has forced Indonesians to stay home to curb the coronavirus spread, resulting in closures of factories, offices and shops.
