|Indonesia leads startup frontier markets in global VC deals since 2012|
Indonesia has accounted for the most venture capital (VC) deals among emerging startup markets since 2012, outpacing rivals such as Poland, Austria, Malaysia, Turkey, and Taiwan, a CB Insights report revealed. In the report, Indonesia is ranked the first in a category called “startup frontier markets”. The category counts over 50 countries, which are defined as “hotspots of rising venture capital activity that are the most outside of places where mainstream VC is concentrated, but show at least some measurable disclosed VC activity.” These countries have contributed between 0.01 and 0.5 per cent of the world’s VC deals since 2012. Indonesia takes 0.46 per cent, followed by Poland (0.31 per cent), Austria (0.25 per cent), Malaysia (0.22 per cent), Turkey (0.22 per cent), Taiwan, Mexico, and UAE (0.19 per cent each), Thailand (0.16 per cent), and New Zealand (0.13 per cent). Jakarta also leads the top ten frontier startup cities, ahead of Dubai, Vienna, Istanbul, Kuala Lumpur and Bangkok. The Indonesian capital recorded $789 million worth of VC funding across 127 disclosed deals in the five-year period. VC deals in the country peaked in 2015, and dipped slightly in 2016. Consumer unicorn Go-Jek snatched the top deal last year through a $550 million Series B round led by KKR and Warbug Pincus. In 2017, one of the major disclosed deals in the country is Traveloka’s $500 million commitment from Expedia, East Ventures, Sequoia Capital, and others. Go-Jek has reportedly received $1.2 billion in a Tencent-led round, but this has never been officially confirmed. Most Indonesian VC funds have seen large volumes as the young ecosystem has called for them to forge deals with smaller ticket sizes. Some of the earliest VCs operating in the country are Spiral Ventures (formerly IMJ Investments Partners), 500 Startups, CyberAgent, and East Ventures. “When we started investing in Indonesia, back in 2013, there were not so many early-stage investors. There were only maybe 500 Startups, CyberAgent, and the like. They are raising more funds now,” said Yasuhiro Seo, partner of Spiral Ventures, in an interaction with DEALSTREETASIA recently. “Meanwhile, another group of VCs like SMDV, Skystar and Venturra Capital, only came around about two years ago. So now there’s a lot of early-stage investors in Indonesia, and there’s a much higher chance for startups to get funds from VCs in Indonesia,” he added. William Altman, tech industry analyst at CB Insights and the author of the report, said that VC deals in startup frontier markets have steadily gone up every year. Well over half of all VC deals deployed to companies in these countries are at the early-stage (seed/angel to series A). In total, there have been around 5,750 deals worth $32 billion closed in these markets since 2012. “Collectively, startup frontier markets are seeing constant increased deal activity every year since 2012, with this year being on track to beating 2016’s total of 1,500 VC deals,” Altman stated. Globally, more than 58 per cent of all VC deals go to US-based companies. The UK, China, India, Germany, and Canada take the next highest shares of VC deals respectively. CB Insights previously reported that corporate venture capital activity picked up in the first half of 2017 on the back of an increase in the formation of new VC units of established global enterprises. Data showed 102 new CVC arms invested in the first half of this year, up 65 per cent from H2 2016. In the first half of this year, corporate VCs participated in 798 deals worth $13.3 billion globally, an increase of 12 per cent over H2 2016 in terms of deals completed, and 8 per cent increase in the total capital invested.