Should Indonesian startups brace for a stormy 2025?

Indonesia’s startup scene hasn’t had a great year. Funding became increasingly scarce, and the industry was also rocked by several scandals.

Total funding raised by the country’s startups in 2024 hit its lowest in eight years.

Funding levels could decrease further in 2025, especially in light of problems at formerly high-flying startups.

Fintech firm Investree lost its operational license due to regulatory issues, while aquatech unicorn eFishery is facing allegations of financial misconduct.

Image credit: Tech in Asia

Weak market conditions and funding challenges are expected to spur more mergers and acquisitions in 2025. The country is also likely to see continued interventionist policies from the government next year, although possibly applied in a more selective manner.

Scandals breeding uncertainty

To consider the impact of industry scandals on investor confidence, we first need to look back at what has happened.

Investree, one of the pioneers of peer-to-peer lending in Indonesia, failed to meet minimum equity and financial regulations, which eventually led to its license being revoked in October.

Its CEO and co-founder Adrian Gunadi is believed to have fled overseas and was subsequently placed on the authorities’ wanted list.

See also: Crisis rocks Indonesia’s P2P lenders. Can they regain trust?

Two months later, the industry was shaken again when eFishery co-founders Gibran Huzaifah and Chrisna Aditya were suspended from their roles as CEO and CPO, respectively. This decision was made by the company’s board following an internal investigation into alleged financial irregularities.

This news came as a shock because the Temasek-backed aquatech firm had appeared to thrive despite the ongoing tech winter. In 2023, eFishery became a unicorn after raising US$200 million in a series D round. The firm officially expanded to India in January this year and had even talked about an IPO.

Before running into trouble, the company had raised over US$400 million in total funding. After India, it had also expressed plans to expand to other countries.

M&A to go up

Selective intervention