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'End of unicorn era': Indonesian start-ups struggle to secure growth funding
Indonesia has seen a 10 percent increase year-to-date in $1 million to $20 million ticket deals compared to last year. However, the country also saw a 19 percent decline in $20 million to $100 million funding often found in series C and D over the same period
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Start-ups across Southeast Asia are struggling to raise capital to support business growth following the bullish funding received by early-stage companies during the first half of the year, prompting some to speculate about the end of the unicorn era. (Shutterstock.com/fatmawati achmad zaenuri)
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tart-ups across Southeast Asia are struggling to raise capital to support business growth following the bullish funding received by early-stage companies during the first half of the year, prompting some to speculate about the end of the unicorn era.
Singapore-based equity firm Asia Partners cofounder and managing partner Nicholas Nash reported that Southeast Asia was not seeing the US$1 billion in funding for start-ups annually that was needed to spur growth.
“This lack of funding is a limiting factor to growth,” he said during a conference hosted by Tech in Asia on Monday. “We see a lot of venture capitalists [VCs] writing checks for seed-stage companies but there is an acute gap in series C and D funding in the region.”
Indonesia saw at least 51 funding agreements announced throughout the first half of the year, with 31 deals being made in the second quarter, higher than the 24 deals over the same period last year, according to DailySocial.id data. As many as 13 of the 31 funding agreements were made with seed-stage companies.
Read also: Indonesian start-ups enjoy wave of funding, investment despite sluggish economy
Nash explained that Indonesia had seen a 10 percent increase year-to-date in $1 million to $20 million ticket deals compared to last year. However, the country also saw a 19 percent decline in $20 million to $100 million funding often found in series C and D over the same period. Meanwhile, the number of start-ups raising capital above the $100 million mark had increased by 44 percent.
Companies that have exceeded the $100 million fund raising mark amid the pandemic include online travel agency Traveloka, which has secured $250 million, and coffee shop chain Kopi Kenangan, which has raised $109 million.
