According to Pilarmas Investindo Sekuritas director Maximilanus Nico Demus, the so-called tech winter has discouraged many companies from pursuing an initial public offering (IPO).

“It all depends on the companies’ business prospects,” he said, adding that, “as long as the business is good, we’re sure people will buy [the stocks]; people will want in, and investors will be interested.”

The pursuit of profitability could be accelerated if a start-up brings down its burn rate, or the money it loses every month, such as by optimizing internal operations, giving fewer incentives to users or monetizing its services.

Heightened demand for digital solutions during the COVID-19 pandemic and a supportive financial market environment made investors bullish on tech firms until just over a year ago, driving up many blue-chip stocks to record highs in late 2021.

That changed abruptly as funding became harder amid interest rates, compounded by doubts about the high valuation of many firms. The tech winter is marked by a slowdown in venture capital funding and mass layoffs at listed and unlisted firms.

Investors now demand to see profit, or at least a clear path to profitability, both around the world and in Indonesia, and many of the metrics long preferred by tech firms to gloss over ongoing losses no longer convince investors.

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