Indonesians have embraced digital technology with alacrity and its 150 million internet users, are among the world’s most avid users of social media such as Facebook, Instagram, Line, Twitter, and YouTube.
The archipelago’s booming digital ecosystem spans online commerce, ride-sharing services, media distribution, and financial services. All this has had an impact on Indonesian citizens—in the form of new jobs, improved access to services, and greater connectivity with global society.
Indonesia has the largest and fastest growing internet economy in the region, according to a report by Google and Temasek. With huge headroom across all sectors, it is poised to grow to $100 billion by 2025, accounting for $4 of every $10 spent in the region.
Indonesia is already home to four unicorns, ride-hailing app Go-Jek, online booking site Traveloka as well as e-commerce platforms Tokopedia and Bukalapak. Others hope to follow in their footsteps.
“Getting a quality service offline in Indonesia is relatively hard, so when people get a quality service online then they tend to change very fast,” said Nathanael Faibis, a former executive at Southeast Asian ecommerce player Lazada and founder of healthcare app Alodokter.
We profile the most exciting and fast-growing startups the country has to offer.
AKULAKU
Dream
Cashless shopping in Southeast Asia
Product
Digital credit card
Founders
William Li
Founded
May, 2014
Headquarters
Jakarta
Total funding to date
$220m
Investors
ANT Financial, Qiming Venture Partners, Arbor Ventures, FINUP
Akulaku is a financial services provider for the urban working class in Southeast Asia and seeks to offer credit to those who cannot get a loan from banks.
Formerly known as Silvrr, the firm started out as a virtual credit card before launching its own ecommerce platform. Akulaku’s marketplace enables consumers to purchase goods with instalment payments without credit cards, but only the requirement of making a down payment for each transaction.
The firm offers online services such as cardless installment shopping, cash loan, bills payment, mobile and travel paid in instalments, according to its website.
Digital credit cards are becoming more popular as non-cash payment instruments. They are directly rivalling credit card products offered by banks.
Akulaku peer, Kredivo, partners with big e-commerce merchants such as Lazada, Bukalapak, Shopee, and Tokopedia.
Only a small percentage of Indonesia’s population own credit cards due to the strict, complex rules and regulations from the government and banking sector, according to a report by Euromonitor. The merchants partnering with digital credit cards may still be limited, and the APR may be higher than some credit cards, but digital credit cards can be obtained more easily compared to conventional credit cards.
A concern would be a consumer backlash. The Indonesian Consumers Foundation (YLKI) has called on Indonesia’s financial watchdog, the Financial Services Authority of Indonesia (OJK) to take action against fintech companies, including Akulaku, after receiving complaints.
In its latest series D funding round, Ant Financial invested in Akulaku in January, according to Crunchbase. Ant Financial declined to comment. Up to and including the series D round, the Jakarta-headquartered firm has raised a total of $220 million across seven fundraisers. Other investors include: Qiming Venture Partners, Arbor Ventures, Chinese fintech firm Finup,
Fidelity International’s venture capital arm Eight Roads Sequoia India and BlueSky Alternative Investments.
Akulaku has operations in Philippines, Vietnam, Malaysia, and its main market Indonesia. It has about 13 million registered users and 3 million people use its online shopping and consumer installment loan services per month, its banking services partner Korea’s Shinhan Bank said in October.
ALODOKTER
Dream
Empower patients and doctors to make better healthcare decisions
Product
Health portal providing content and interaction with Indonesian doctors
Founders
Nathanael Faibis
Founded
2014
Headquarters
Jakarta
Total funding to date
$12.1m
Investors
SoftBank Ventures, Lim Der Shing, 500 Startups, Golden Gate Ventures, Fenox Venture Capital
The rising urban middle class in Indonesia is increasingly going online to search for healthcare, as navigating the country’s cumbersome offline system is often time-consuming, complex and stressful. Launched in 2014 by Nathanael Faibis, a former executive at Southeast Asian ecommerce player Lazada and French national, Alodokter provides medical services to 18 million monthly active users via its mobile app for patients and doctors.
“We started Alodokter in 2014 as a content platform, to be the webMD of Indonesia,” Faibis told FinanceAsia.
Alodokter already facilitates 300,000 monthly chats between patients and over 500 doctors in its mobile app.
In the coming years Alodokter will work to deepen the engagement with its already extensive user base to push them towards higher-value services such as health insurance, rather than chase more users.
Alodokter also sells white label insurance products, manufactured by companies including France’s AXA but branded Alodokter.
“We’re growing into a platform where people can manage their health fully, from chatting to doctors to booking an appointment. We want to be the go-to place for people to start their medical journey.”
The local language website provides online booking of doctors and hospitals platform in Indonesia and has a medical content database for patients and doctors. Articles on its website are written by medical journalists and then edited by doctors for quality assurance.
Alodokter is also gathering data on Indonesian’s healthcare concerns, Faibis has estimated that 60% of Indonesia internet users will visit the company’s platform at least once every six months.
Alodokter received a $9 million series B investment from Softbank Ventures and Golden Gate Ventures in 2017.
“Things can take time to build. Regarding funding, the two players are getting much of the cake, but that will change, there will be more funding for smaller companies that want to grow,”
Peer Halodoc has won funding from Gojek and local private equity firm Northstar.
Regarding PingAn Good Doctor’s imminent arrival in Indonesia Fabis said he welcomed their arrival as – we think it is a good thing “as it is not easy to build a category on your own”.
CROWDE
Dream
Improve the welfare of farmers in Indonesia
Product
P2P lending platform for farmers in Indonesia
Founders
Yohanes Sugihtononugroho and Muhammad Risyad Ganis
Founded
September, 2015
Headquarters
Jakarta
Total funding to date
c.$500,000
Investors
GREE Ventures, Crevisse Ventures, UMG Myanmar
Crowde is a mobile application that offers peer-to-peer (P2P) lending to farmers to help raise their productivity and incomes by connecting them with sources of capital.
The app crowd sources the funds for investors. It makes it easier for investors to directly access farming projects and share in their profits, starting with amounts as low as Rp10,000 (71 cents).
There are more than 20 million farmers in Indonesia and together they contribute 13% of Indonesia’s economy, but farmers are painfully undercapitalised.
“If you think of the opportunity, it is massive,” said one investor. The advance of urbanisation in East Java is rapidly shrinking of agricultural land. Struggling smallholders are changing professions and drifting into city life, exacerbating the change in land use.
“We’re only just scratching the surface right now,” said Yohanes Sugihtononugroho. Sugihtononugroho together with Muhammad Risyad Ganis founded Crowde in 2015 after studying and living the problems of farmers.
Sugihtononugroho tried his hand at farming, including planting corn and cucumbers. “I got scammed a lot,” he said. He did manage to build a farm of 50,000 chickens, this enterprise struggled one year when industrial-size farms dumped sick chickens on the market during an epidemic, just prior to Christmas which is peak season.
“We couldn’t survive. I realize farmers needed finance that would help them over such market fluctuations. That triggered the journey,” said Sugihtononugroho.
Potential investors can register, choose a farm project that needs capital, calculate the profit projections of the farm project and monitor the project’s progress through reports sent periodically Crowde.
Such transparency is critical for the system to work as Indonesia’s agricultural sector has been blighted by many lending scams.
“There are a lot of bogus schemes done over the internet, especially in agriculture,” one of Crowde’s founders, Yohanes Sugihtononugroho, told FinanceAsia. “The farmer never sees the hard cash, we transform their money into seeds, fertilizer or other supplies that they need,” said Sugihtononugroho.
On the other side, Crowde also educates the small, retail investors on risks, helps properly gauge expectations and advices them on methods of investing. Crucially, Crowde is one of the 78 P2P lenders in Indonesia registered with the Financial Services Authority of Indonesia (Ojk) as of December.
“We work closely with the Ojk and we share our experiences of lending to farmers, which very few people do,” said Sugihtononugroho.
Crowde is in the process of a series A round of funding. A person familiar with the matter said they are targeting less than $10 million from investors that can further the business’ prospects including financial institutions and regional venture capital funds.
The firm raised a seed round of funding last year from three investors: GREE Ventures, Crevisse Ventures and UMG Myanmar. The founders are still control the company.
Challenges include the lack of mobile infrastructure across much of Indonesia especially in rural communities and building trust with farmers who are suspicious of lenders they do not know.
Many of them have heard so many empty promises from governments and associations, “they just don’t believe us,” said Sugihtononugroho, adding a barrier to entry in many areas is scale as farmers will consult with each other and if the brand is unknown it will fail to get traction.
Another source of concern is fierce competition from loan sharks who have made a killing charging farmers who cannot access bank loans high interest rates. They set on fire a Crowde small branch office in West Java, according to the company.
Crowde is targeting 100,000 farmers on the platform and to disperse more than $50 million to farmers, both by next year.
Crowde has 24,000 thousand retail investors and has helped fund 16,000 farmers across Indonesia, Sugihtononugroho told FinanceAsia. It has doubled the number of farmers and investors on its platform over the previous 12 months and tripled the volume of disbursements from in the past year, he added.
“Our mission is helping more farmers, so when it comes to profitability, we ask ourselves if there are more farmers to help, that will always be our main concern,” said Sugihtononugroho.
QUEENRIDES
Dream
Disrupt road safety education for women
Product
Online and offline platform for female drivers
Founders
Lim Fahima
Founded
2016
Headquarters
Jakarta
Total funding
to date None
Investors
None
A roundup to entrepreneurial companies to watch in Indonesia would not be complete without a ride-hailing app.
Following in the tracks of its larger ride-hailing peers, Go-Jek and Grab, Queenrides is a fast-growing startup dedicated to women drivers which is already profitable.
Anyone that has dodged through the crowded and narrow street of Jakarta knows safety is a concern in the city. Queenrides’ online and offline community platform is dedicated specifically to educating women on how to ride and drive cars safely.
The number of female drivers has risen by 42% in the past five years and the number of road accidents involving women has rocketed 49.5% in the past five years, according to Queenrides’ research.
Before founding Queenrides in 2016, Iim Fahima surveyed 205,000 women about driving, alarmingly she found that almost all of them were not aware of road safety as an issue, even more alarmingly, about 90% of the women had obtained their driving license by bribery rather than pass a test.
To get across her message about road safety, Fahima says she is disrupting the very paternalistic approach to messaging coming out of government organisations which uses fear to change behaviour. Instead she is coaxing in women to her platform, by using top models and high-fashion photographers to soften and popularise the vital information about accident prevention.
Queenrides curates a community of around 200,000 users from all over Indonesia. Fahima intends to grow her audience to 20 million women within five years.
“I monetized the platform even before it was ready,” Fahima, an advertising executive, told FinanceAsia by bringing in advertising clients including Toyota, Honda and beauty brands, all keen to get in front of her audience.
A challenge is the cut throat competition for customers in ride hailing and uneconomic subsidies that are proliferating and pushing back breakeven targets among its peer group. However Queenrides is creating an ecosystem including advice on style and beauty that sets it apart. “My direction is my own, and not typical of other founders,” she said.
RUANGURU
Dream
Affordable education online
Product
On-demand tutoring services
Founders
Belva Devara and Iman Usman
Founded
2014
Headquarters
Jakarta
Total funding to date
$50,000
Investors
East Ventures, Venturra Capital, UOB Venture Management
Ruangguru is focused on education-based services and has over 10 million users and manages over 200,000 teachers it told FinanceAsia.
Ruangguru, which means Teachers’ Room, aims to widen access to high-quality educational content covering 100 subjects, to the furthest corners of the country which is made up of 17,000 islands via mobile technology.
The company was founded in 2014 by Belva Devara and Iman Usman. Ruangguru works with 33 (out of 34) provincial governments and over 326 municipalities and districts in Indonesia. In addition, Ruangguru also offers subscription learning videos, private tutoring marketplace, on-demand tutoring services, online exam tryouts, and more.
The firm raised series A and series B funding from East Ventures, Venturra Capital (the venture capital arm of Indonesian conglomerate Lippo), UOB Venture Management, among others.
WIR GROUP
Dream
Help brands connect with consumers in an augmented reality
Product
Virtual stores, IoT devices, creative marketing
Founders
Philip Cahyono, Daniel Surya, Michael Budi and Jeffrey Budiman
Founded
2009
Headquarters
Jakarta
Total funding to date
Undisclosed
Investors
Founders and technology sector private investors
As traditional shop keepers struggle to compete with the rise of ecommerce giants, Jakarta-headquartered WIR is offering a solution: virtual stores.
Housewives across Indonesia can open a franchise of a famous brand for as little as $18. Their customers browse in their 3D digital shop for products as if they are in a physical store, plucking virtual products off the shelves while navigating between aisles.
While popular smartphone games like Pokemon Go or Snapchat’s suite of filters have turned people on to the possibilities of augmented reality (AR) globally, WIR has caught the Indonesian public’s imagination by successfully harnessing the digital world to help brands connect to the mass market. Budiman, Philip Cahyono, Daniel Surya and Michael Budi co-founded the company in 2009.
“Back then no one really understood what AR really is … there was no one really believing in us,” said WIR’s chief executive officer Surya in an interview with FinanceAsia.
Now the firm is profitable, employs about 300 people and is preparing for an IPO in Jakarta later this year.
Unlike many of Indonesia’s unicorns, where the founders have been substantially diluted, WIR’s original team are still in control of the company so have more flexibility when considering listing options as well as creative control over the company.
WIR started off by helping clients develop advertising campaigns: with projects ranging from presentations of luxury homes on behalf of developers to augmented reality T-shirts emblazoned with roaring tigers that leap out at passers-by.
In 2015, it won a high-profile mandate in Nigeria to help presidential candidate Muhammadu Buhari connect with millennial voters. WIR developed an app that triggered when voters pointed a camera at any of the parties’ logos, even the oppositions’. Buhari would pop up and talk about his vision for the future.
“It was one of the very first use cases of AR in Africa,” said Surya. Buhari went on to win the election. Fast forward to today and WIR has completed more than 1,000 projects around the world.
Mindstores
WIR’s unit MindStores began working with Indonesian mini-market chain Alfamart in 2015 to create its 3D virtual network of stores. They are targeting housewives looking to make some extra money but who can’t gather the necessary capital to open a physical store.
“Franchises are very popular in Indonesia. A lot of Indonesian mothers open businesses to try to help their families,” said Surya. WIR makes it relatively cheap and easy, to open a physical Alfamart franchise would cost around $50,000 but an AR store only costs $18 to set up.
An AR store also offers the consumer more choice and the retailer more products to sell. A typical Alfamart franchise carries around 3,000 lines of products but a virtual one can house up to 30,000.
Customers can pay in cash and the product is delivered by Alfamart. The housewife collects up to 15% commission on each sale.
“All these mothers and housewives don’t really need to understand that they are using augmented reality and how it works, all they need to do is use the platform to get extra money,” Jeffrey Budiman, chief technology officer, told FinanceAsia.
Digital reality
WIR’s latest offering is a location-based AR mobile app, Minar, where the consumer collects virtual coupons to redeem in stores such as McDonald’s. It’s a form of marketing that crowds people into stores and restaurants.
The app has collected 20 new clients in less than a year, including Honda Motor and Alfamart, said Surya. WIR recently launched Minar in Malta in collaboration with a hotel and tourism association which helped them connect with potential clients among restaurants and cafes across the island.
Such gimmicks to a certain degree depend on users’ tech savviness, connections and devices.
While technology giants Google and Microsoft are striving to make AR glasses less bulky with higher processing power to capture digital information around them, for now people are using their mobile phones and tablets.
“It’s all about Big Data, augmented reality; the borders between what’s real and the virtual world are becoming blurred. It will become immersive,” said Budiman.
