Indonesia can expect more capital going into its start-ups in the future as the country already enjoys the highest flow of funds in Southeast Asia after Singapore, according to Sequoia Capital India.

The digitalization of Indonesia’s economic activity was one of the growth areas for start-ups in the country.

“Another good thing about Indonesia is that it has a more mature investing ecosystem in the region, and there are definitely opportunities going forward,” Sequoia Capital India managing director Abheek Anand said during the webinar “Reimagining the future of Indonesia’s economy”, which is part of The Jakarta Post’s Jakpost Up Close webinar series, on Wednesday.

At least 31 funding agreements for Indonesian start-ups were announced in the second quarter, higher than the 24 deals recorded over the same period last year, according to data from dailysocial.id. As many as 13 of the 31 funding agreements were made with seed-stage companies, such as the US$10 million in funds secured by supply chain start-up Ula and the seed funding for big data analytics firm Bonza in May.

Sequoia has been increasing its penetration into the Southeast Asian market, especially Indonesia, as it funds firms from small start-ups to technology giants like ride-hailing application Gojek and e-commerce platform Tokopedia. It also develops early-stage start-ups though accelerator program Surge by Sequoia India.

“For Sequoia, our bread and butter are consumer products and services. We are seeing more entrepreneurs creating world-class consumer products in Indonesia and then going regional,” Anand said, giving an example of its portfolio company Kopi Kenangan, which is set to operate in Thailand, the Philippines and Malaysia, post-pandemic.

He said he also saw opportunities in the “old-school” digital economy, from e-commerce and cashless payments to warung (mom-and-pop shops), manufacturing and financial services, among other things.

Some start-ups, like Ula and Gudang Ada, have been digitalizing warung, while others are building apps for small businesses and some are pushing for better education technology.

He noted that technology had become a key tool for businesses to survive during the pandemic, and looking forward, it should also benefit the Indonesian economy as a whole.

“While we are facing a recession, from the technology perspective, there are opportunities like never before,” he said.

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