The billion-dollar edfintech opportunity in Indonesia

Every day, 100k+ smart people read our newsletter. You can sign up here.

Hello readers,

I’m at that point in my life where I’m beginning to think, “Hey, getting an MBA would be pretty useful,” – that is, until I looked up the average school fees for an MBA and threw the idea out of my head. Bank loans might be readily available, but my heart ain’t ready for that US$100,000+ debt yet.

The education-focused fintech startups in Indonesia are solving this problem, albeit on a smaller scale: They provide loans to help parents and students pay for tertiary education. This industry is still relatively young but we’re seeing a huge opportunity for it.

Today we look at:

• How big edfintech is in Indonesia
• Google backing another India-based startup
• Other newsy highlights such as WeChat Pay’s and Alipay’s newest competitor and the Indian government’s objection to WhatsApp’s new privacy policy

PREMIUM SUMMARY

A US$1 billion opportunity

Previously, we explored the edfintech startups that are rising in Indonesia. Today, we’re telling you just how much the industry can grow, and what you can expect from it in the future.

• Over US$1 billion: That’s the market size for tertiary student loans in Indonesia alone. Don’t forget that there are also other loans available for K12 students, education institutions, and students purchasing learning products, so expect the overall market size to be even larger.
• Getting better with age: The edfintech industry looks poised to age like fine wine as its startups’ operational and credit costs generally drop as the platform scales. This means that they will see better margins over time and pocket more profits in the long run.
• Getting educated for edfintech: But don’t celebrate just yet because the edfintech industry still has hurdles to overcome. Currently, most Indonesians are clueless about the option it offers. And even if they know of it, the practice of borrowing money or making loans is still culturally considered a “taboo.”

Dive into the full story with charts: ‘Edfintech’ in Indonesia: the billion-dollar opportunity

STARTUP SPOTLIGHT

India is Google’s new favorite?

Google has made another investment in an India-based startup. This time, it’s hyperlocal delivery firm Dunzo, which completed US$40 million in a series E round from investors including Google, Lightbox, and Evolvence.

How to calculate a startup’s valuation