Indonesia is Predicted to Have Three New Unicorns from These Sectors

Alpha JWC Ventures and Kearney estimate that Indonesia will have three new unicorns in the next five years. The three of them will come from the e-commerce sector, financial technology (fintech), and the digitization of Micro, Small and Medium Enterprises (MSMEs).

This estimate refers to research entitled ‘Unlocking Next Wave of Digital Growth: Beyond Metropolitan Indonesia’. This is based on a survey of over 2,100 end consumers and 1,100 retailers in 23 cities. In addition, interviews with stakeholders in 13 cities at tier two and three.

Currently, Indonesia has one decacorn or startup with a valuation of more than US $ 10 billion, namely Gojek. In addition, there are four unicorns or valuations above US$ 1 billion, namely Tokopedia, Traveloka, Bukalapak, and OVO.

“We see that three unicorns will emerge from three major categories,” said Alpha JWC Venture Co-Founder and General Partner Jefrey Joe during a virtual press conference, Wednesday (31/3).

Three Sectors with the Potential of Giving Birth to a New Unicorn

First, e-commerce, because people switch to online shopping during the corona pandemic. “Social commerce also has the potential to become a unicorn,” he said. A study by Facebook and Bain and Company shows that the number of digital consumers in Indonesia is estimated to increase from 119 million in 2019 to 137 million last year.

The percentage also jumped from 58% to 68% of the total population. Meanwhile, the number of digital consumers in Southeast Asia is listed in the Databoks below. This data shows potential transactions that can be achieved by online merchants, including in e-commerce.

Second, fintech, especially financing (lending). Apart from the need, this sector has been boosted by e-commerce. Jefrey also sees that credit scoring by fintech lending is getting better. As is well known, startups in this sector have a data center called pusdafil.

This tool, which is also known as the Fintech Data Center (FDC), has captured 26 million borrowers’ data as of the end of last year. “With data and an increasingly mature ecosystem, we are sure that there will be (unicorns) from this sector,” said Jefrey.

Based on OJK data as of February 2021, the accumulated distribution of monthly loans reached Rp. 169 trillion or an increase of 6.23% on a ytd basis. Meanwhile, monthly loan disbursements in February reached Rp. 9 trillion or an increase of 2.13 ytd.

Third, providers of MSME digitization solutions, including business to business (B2B) commerce. Decacorn Gojek and Grab also penetrated this service through GoToko and GrabMerchant.

Edtech and Healthtech Startups also have the Potential to Give Birth to New Unicorns

However, education (edtech) and health (healthtech) startups were said to be the next Indonesian unicorn. Jeffry said, the use of the services of these two startup companies was indeed rapid during the corona pandemic.

In July, the use of online learning applications has increased in ASEAN due to the impact of the coronavirus, based on data from the World Economic Forum (WEF). In terms of healthtech, Frost and Sullivan estimates that the value of the health industry in Indonesia was US$ 21 trillion last year, up from US$ 7 trillion in 2014.

However, Jefry said that there are many things that need to be taken into account. Not all health services can be adopted digitally.

Previously, ProSehat Founder and Chairman of the Indonesian Healthtech Association, Gregorius Bimantoro, said that the use of virtual health services was not yet massive in the country, even though it had increased during the pandemic.

“Not all of them have switched to virtual consulting,” said Bimantoro in a virtual media gathering event for the Indonesian Startup Association (Amvesindo) entitled “Exploring the Dynamics and Trends of Startup Funding 2020-2021”, last November (2/11/2020).

The government has indeed spent large funds for handling Covid-19. However, “it does not go to healthtech, but offline services,” said the man who is familiarly called Bimo.