Indonesia’s VC Landscape in 2023
Jakarta, Indonesia – Indonesia’s venture capital ecosystem is projected to see a major pullback this year, according to a new report from AC Ventures and Bain & Company.
The report forecasts VC deal value could decline up to 80% in 2023 compared to last year.
Several factors are driving the sharp drop, including worsening macroeconomic conditions globally, rising interest rates, and weaker consumer and business confidence levels.
Challenges Behind the Drop
The number of large deals above $50 million plunged 88% versus 2021, per the report. However, smaller deals under $10 million saw healthy growth.
Investment trends shifted toward ESG and climate tech, with emphasis on electric vehicles and battery technologies.
A few sectors bucked the downturn, as aquaculture deal value grew 1.2x and healthtech jumped from $8 million in H1 2022 to $51 million in H1 2023. This excludes Halodoc’s $100 million series D round in July.
While Indonesia’s startup funding environment has cooled significantly, smaller deals continue apace. Key sectors like sustainability and healthcare are also attracting investor interest despite broader VC market challenges.
As macro conditions stabilize, Indonesia’s strong fundamentals and demographics could reignite more robust VC activity. But for now, deal flow is down shifting as investors grow more selective amid global uncertainty.
