Investors, including venture capitalists, estimate that five startup sectors will be flooded with funding this year. The startup fields in question are financial technology (fintech), health (healthtech), education, logistics, and e-commerce. East Ventures partner Melisa Irene said, fintech is considered potential because there are many people in Indonesia who have not been touched by financial services. In addition, the use of its services has increased during the corona pandemic. "Fintech is the number one service for transactions," said Melisa at the PwC NextLevel - 2021 Outlook: Start-ups, Investments, and Corporate Collaborations, Tuesday (19/1). Meanwhile, the Financial Services Authority (OJK) data shows the financial inclusion index. Indonesia is only 76.19% in 2019.
Fintech has also become the favorite sector for funding from investors. Katadata.co.id noted that 19 out of 107 startups that received funding over the past year were fintech. Apart from fintech, Melisa assessed that e-commerce startups will still be in demand in 2021. "This sector has been positively affected (the Covid-19 pandemic)," he said. Derivative sectors such as digitalization of shops or online to offline (O2O) are also attractive to investors. "Startups that support the supply chain are very attractive," he said. Moreover, according to research by Euromonitor International 2018, it shows that the majority of Indonesians, Indians and Filipinos prefer to shop at grocery stores.
In addition, the logistics sector is in demand by investors. The development of e-commerce during the corona virus pandemic is a positive sentiment for logistics startups. This is because the high demand for online shopping has boosted the demand for goods delivery services, especially Business to Consumer (B2C) and Consumer to Consumer (C2C). Even so, the Business to Business (B2B) business model that provides end-to-end services is also promising. East Ventures Co-Founder and Managing Partner Willson Cuaca added, the education and health sector will also be attractive to investors in 2021. "Through edtech, everyone can access education with just a cell phone," he said. Meanwhile, healthech is still the mainstay of the community in providing long-distance health services or telemedicine. The same thing was conveyed by Deputy Chairman I of the Indonesian Venture Capital Association for Startups (Amvesindo) William Gozali. He said healthtech was targeted by investors throughout the pre-Covid-19 period. Reports from Google, Temasek, and Bain and Company also show that health and education startups are in demand by investors. This is because services in these two sectors are needed during the corona pandemic. They noted that the use of digital health services has quadrupled compared to before the outbreak of Covid-19. Meanwhile, the number of educational app downloads tripled. Even so, several studies predict funding at startups will decline this year even though the available capital or dry powder is quite abundant.
CEO of Mandiri Capital Indonesia Eddi Danusaputro said, actually investor interest in investing in startups remains high despite the corona virus pandemic. "But we have to find a sector that is relatively resilient in this situation or not," he told Katadata.co.id, last month (7/12/2020). In addition, investors have begun to focus on investing in startups that have a clear path to profit. "Many investors have also switched to the later stage, because they are looking for a more stable or less risky business, aka it has been tested," he said. The later stage is an advanced funding round such as series B and above. At this stage, usually startup products have been accepted by the market. This is stated in a report by Google, Temasek, and Bain and Company entitled 'e-Conomy 2020'. This study shows that dry powder in Southeast Asia, including private equity and venture capital, reached US $ 11.9 billion in 2019. Google, Temasek and Bain and Company noted that investors still have sufficient capital to invest. However, "most have adopted the wait and see approach, aka wait and see," the report was quoted as saying.
