D2C brands in Indonesia are catching the eye of VCs

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Living in Singapore, my perspective on business has always been subconsciously colored by the relatively miniscule local market. The city-state is usually a hub for regional operations, and the market is typically just one part of a larger play for companies.

It’s a different story in Indonesia, of course. The local market is so massive that even direct-to-consumer (D2C) companies have a scaling potential that’s as attractive as those of tech companies. Local investors have been taking notice, and it seems we may see a wave of VC-backed consumer brands emerging soon.

Today, we look at:

• The rising trend of VCs investing in D2C companies in Indonesia
• A GoTo-led consortium aims to solve the oxygen issue in Indonesia
• Other newsy highlights such as a couple of series A funding deals and ByteDance’s grand gaming plans

PREMIUM SUMMARY

Give the people what they want and get paid

My Singaporean brain sometimes forgets about the scale of the Indonesian consumer market. Living in this little island nation, I’d think that a local business opening a handful of outlets across the city-state over the course of its lifespan would count as a success. In Indonesia, Kopi Kenangan has gone from owning six to 324 stores across the archipelago in just two years, and I don’t think it’s done yet.

Many other D2C brands have caught the eye of VC firms in recent times, and that attention comes with serious money and eye-popping valuations.

• Pandemic? No problem: Despite Covid-19, 14 consumer brands in Indonesia raised VC money last year, doubling the tally of the previous year. In the first half of 2021 alone, as many as 17 VC firms have poured capital into consumer brands.
• Is this really possible? VC firm Alpha JWC, for one, has backed several brands across different categories, with the hope that these startups will be capable of growing 30, 50, or even 100 times in a short period of time.
• Looking overseas for inspiration – and warnings: In the US, success has come from similar partnerships such as Allbirds and Dollar Shave Club. However, there are also cautionary tales like the case of mattress startup Casper, which saw its valuation slashed by half after its public debut.

Read more: In Indonesia, a golden age of VC-backed consumer brands may be imminent

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