Public markets to the rescue as private capital dries up for Indonesian startups

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Hello reader,

Tech companies used to go public at an early stage of their lives. For example, Apple (AAPL, NDAQ) was founded in 1976 and listed four years later in 1980.

Google (GOOGL, NDAQ) was born in 1998 and debuted on the stock market after six years in 2004.

That same year, Facebook (META, NDAQ) was established. It took eight years for the company to do an IPO in 2012.

However, the general trend in the last decade or so had been for companies to wait for as long as possible before listing.

For instance, 13 years after it was founded in 2010, Stripe is still a private firm. So is ByteDance – the creator of viral social media app TikTok was established 11 years ago in 2012.

In the past, fast-growing startups could only rely on private capital to a point before needing to go public to tap the far bigger pools of capital on offer in the public markets.

But in the last 15 years, interest rates were low and money was easy, which meant that there were plenty of funds to be had from VC, growth equity, and other providers of private capital. This allowed companies to remain out of the glare of the public markets for much longer periods.

That may now be changing.

In Indonesia, startups have seen a decline in funding, both in terms of deal volume and value. This may make listing a more attractive option for startups looking to raise capital.

My colleague Budi looks at the data and details how the Indonesia Stock Exchange has an incubator program to assist startups in their IPO journey.

— Simon

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