When Indonesia stole the mega-funding spotlight from Singapore

Between January 2018 and February 2019, 75% of the more than US$7.8 billion in total funding raised by tech firms across Southeast Asia came from just seven transactions.

Most of these so-called “mega rounds” – funding rounds of at least US$100 million – in the region were raised by startups based in Singapore. However, things changed in 2020 as Indonesia pipped the city-state to clock a larger number of jumbo funding rounds.

Though things seem likely to revert to status quo this year, it’s a sign that Indonesia-focused firms can match up to regionally focused rivals in fundraising prowess, as Tokopedia has demonstrated. The next test for Indonesian tech startups will be to replicate this success in the public market.

Mega rounds are a relatively new phenomenon in Southeast Asia. Singapore only saw its first such fundraise in 2012, and it took two years before mega rounds made their way to Indonesia.

Between 2010 to 2021, Indonesia has caught up with and even surpassed Singapore on two occasions:
– In 2016, Indonesia saw more mega rounds than Singapore but less funding from mega rounds overall.
– In 2020, Indonesia surpassed Singapore in terms of both the number of mega rounds as well as the total funding obtained from them.

In 2016, regional behemoths such as Singapore’s Sea Group, Grab, and Lazada, as well as Indonesia’s Gojek and Tokopedia (now GoTo) dominated the funding scene. As will become apparent, the share of funding some of these titans received far outstripped the competition.

On the other hand, 2020 saw many new entrants in the Indonesian tech scene like e-wallet provider LinkAja and ecommerce company Bukalapak secure mega rounds. Before its merger, Gojek had also closed a massive US$2.5 billion Series F round. These mammoth deals propelled Indonesia to fly past Singapore in the funding race last year.

On the whole, the total capital that Singapore startups banked in mega rounds since 2010 was more than double that of their Indonesian peers.

Breaking mega-rounds down by individual companies or segments paints a more nuanced picture. Since 2010, Singapore’s Grab has received the largest funding share – nearly 2x the money raised by rival GoTo and roughly 23% more than the total funding received by all other companies that have raised mega-rounds.

All this lends confidence to the expectation that Indonesia will remain competitive in the funding arena with Singapore going forward. Some observers who are bullish on the prospects for startups in Indonesia are confident that the archipelago will produce “at least 10 more” unicorns by 2030. The economic fallout of the recent Covid surge in the country, however, threatens to upend these predictions.