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VCs eye real sector rather than risky start-ups amid funding winter
Venture capital firms are shifting investments toward tried and tested businesses in Indonesia as the country’s start-up scene faces a prolonged funding winter.
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Illustration of venture capital funding.
(Shutterstock/Panchenko Vladimir)
V
enture capital (VC) firms are shifting investments toward tried and tested businesses in Indonesia as the country’s start-up scene faces a prolonged funding winter, according to the Financial Services Authority (OJK).
“The tech winter phenomenon that occurred last year has prompted a shift in the target market of venture capital firms,” OJK supervisor for multifinance, venture capital and other financial services Agusman stated on June 4, as quoted by news agency Antara.
Agusman expressed his hope that the real sectors could contribute positively to the development of the VC industry going forward.
He also suggested that government programs could strengthen the VC industry through ecosystem support and incentives.
In addition, he noted that, with Indonesia’s rapid digital development, venture capitalists were likely to invest in sectors that adopted digitalization.
In April, the OJK recorded 1.04 percent year-on-year (yoy) growth in venture capital funding to Rp 16.49 trillion (US$1.01 billion), marking a turnaround from the 0.34 percent yoy decline logged in March, but the figure represents a slight decline on a month-to-month (mtm) basis from Rp 16.73 trillion logged in March.
The trade sector secured the largest amount of VC funding in April at Rp 7.93 trillion, which marked 15.99 percent yoy growth. Information and communication followed with Rp 2.42 trillion in funding, up 154.90 percent yoy.
