StartUp Hub Jakarta
Jakarta, the largest city of Indonesia, is also known as one of the biggest megacities in the world. The country’s growing middle class keeps flocking into the city, bringing with it a strong purchasing power, high penetration of mobile phones and an enormous demand for online services. Altogether, this presents plenty of opportunities for new business ideas.
Fast Growth with a need for stable businesses
Solving the upcoming challenges caused by the city’s fast growth means that startups have to be practical and financially stable. For this reason, Jakarta is already home to a number of startups focusing on travel, e-commerce, agri tech, health tech, fintech and lifestyle. Successful examples are Traveloka, Lamudi or Go-Jek. The outcome is a strong market for tech startups to explore and consequently, more Indonesian investors including Merah Putih Incubator, GDP Venture, East Ventures and GREE Ventures are entering the market.
Bridging the capital gap
From Indonesian tycoons to foreign venture capitalists, there are potential investors with hundreds of millions of dollars looking for opportunities. But few local startups have had the scale to warrant big funding. The Indonesian tech scene is still dominated by Seed and Series A deals, many of which do not go beyond $100,000.
Over the past few years, the number of coworking spaces has grown rapidly. Many of them like WorkOUT, TierSpace and Comma, are to be found around the Sudirman Business District in the heart of Jakarta and focus on startups. Some are even backed by venture capital, such as East Venture Hive. Coworking spaces are still facing the challenge of attracting sufficient companies since many bootstrapped startups and freelancers prefer to work from home where the internet connection is more stable and they do not have to pay fees.
Entrepreneurship is still on the weaker side. Difficult access to capital for small businesses and a lower level of education resulted in one of the lowest rates of new business formation in Asia. Nonetheless, McKinsey predicts the Indonesian economy to become the 7th largest economy by 2030 and thus the center of growth.