In the recent DailySocial Fintech Report, it is revealed that while existing fintech companies in Indonesia continue to gain traction, the number of new fintech companies in the country actually declined.
In 2018, there are 61 newly founded peer-to-peer (P2P) lending companies operating in the country, but this year the number has slumped to 57. A similar phenomenon also happened to other categories such as digital payments.
This happened despite the increasing popularity of fintech as a vertical in Indonesia –and the fact that OVO, the fifth unicorn startup in the country, is a fintech startup.
Presented today at the Nexticorn International Summit 2019 in Bali, Indonesia, by DailySocial CEO Rama Mamuaya, the report was created under a partnership with Indonesia’s financial services authority (OJK).
It predicted that despite the slowing growth, the next Indonesian unicorn will be a fintech company.
“There are companies that are already valued in the hundreds of million dollars or more, such as Akulaku or Kredivo, and they are all fintech companies,” Mamuaya said.
“Whatever the company is, the next unicorn will be a fintech company. The question is whether there will be any meat left? If we want to start another fintech company, can we still grow big?” he continued.
In the fintech sector, the report noted that there are 22 fintech funding rounds being announced in Indonesia in 2019, totalling US$121 million.
It also noted that since OJK started issuing licences this year, 13 companies in the lending category have secured theirs.
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The nature of Indonesian unicorn
During his keynote speech at the Nexticorn International Summit 2019, former Minister of Communications and Informatics Rudiantara addressed frequently asked questions about Indonesian unicorns, one of them being WeWork’s recent IPO failure and how it will affect the other unicorns.
He said that Indonesia has no reason to worry as it is a completely different ecosystem with its own unique opportunities.
“We still have a huge untapped market by any new business processes. We have 80 million millennials with 65 per cent of the population having access to the internet by last year, more than any market in Southeast Asia,” he said, adding that the government is ready to maintain the purchasing power of its people.
At the side of the event, Rudiantara further elaborated to the press that unicorns in Indonesia also have a different nature than those in other markets.
“[Our unicorns] are cautiously progressive. It’s different to Adam Neumann [and his company] who is purchasing companies and properties here and there … We don’t take such an approach,” he said.
“There is also this new balance where investors no longer call for startups to burn money,” he closed.
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