This post is part of the e-Conomy SEA 2024 blog series providing insights into Indonesia’s evolving digital landscape. The report highlights Indonesia’s resilience and adaptability amidst a challenging investment climate and changing private funding patterns, with early-stage investments focused on transformative areas such as AI and climate tech. Driven by the growth of these two sectors, Indonesia is poised to strengthen its position as the country with the highest digital growth in Southeast Asia.
Indonesia’s private funding landscape remains selective, with $300 million across 51 deals in the first half of 2024. Early and growth stage funding (Seed to Series C) maintained a steady flow, recording $200 million, marking a 23% increase from H2 2023. However, late stage funding (Series D and above) has seen a decline, dropping by 96% from $500 million in H2 2023 to almost zero in H1 2024.
Investors are starting to enter new sectors
This trend reflects a cautious shift, with investors focusing on early-stage, high-growth sectors such as digital financial services (DFS) and e-commerce, while emerging industries such as sustainability technology and software gain traction. This selective approach contrasts with 2021’s high of $9.1 billion, which signaled a focus on sustainable and long-term growth areas in Indonesia’s burgeoning digital economy. The consistent funding levels through 2024 suggest that investors are taking a cautious yet optimistic stance, prioritizing sustainable growth and monetization.
Around 65% of investors in Indonesia expect national funding activity to increase in the 2025–2030 period, especially in emerging sectors. This optimism is also evident at the Southeast Asian level, with 60% of investors highlighting software and services as the main investment targets for the next few years. Fintech, healthtech, and AI are also sectors they are eyeing due to their high growth potential.
The e-Conomy SEA 2024 report, jointly produced by Google, Temasek, and Bain & Company, provides valuable insights into the dynamic investment landscape in Indonesia and Southeast Asia. Focusing on high-growth areas, investor sentiment, and long-term sectoral potential, the report provides a comprehensive overview of digital economy trends in the region.
Click to explore the e-Conomy SEA 2024 blog series.
