StartUp Hub Jakarta
Jakarta, the capital and 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, Go-Jek, WOOK or Tokopedia. The outcome is a strong market for tech startups to explore and consequently, more Indonesian investors including Merah Putih Incubator, GDP Ventures, East Ventures and Venturra as well as international players like Sequoia, Softbank or 500 startups 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.
Based on a recent study by CB Insights on long tail countries in terms of emerging startup activity and VC investement Jakarta, takes the largest share of global VC deals since 2012, almost twice as large a share as Dubai, which is the next most-active hub among the identified emerging startup markets. Jakarta companies saw 47 VC backed deals last year.
Over the past few years, the number of coworking spaces has grown rapidly. Many of them like EVHIve, Coworkinc, and GoWork, are to be found around the Sudirman Business District in the heart of Jakarta or around the hip spots of South Jakarta. Some are even backed by the Jakarta government, such as JSCHive or the Jakarta Creative Hub.
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.