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Five reasons why you should be an angel investor in Indonesia today
Angel investors usually offer more profitable deals than other lenders, because they usually invest in teams rather than on business continuity. They are more focused on helping businesses succeed rather than reap the huge returns from their investments.
In January, Fortune named Indonesia one of the seven best countries in the world to invest. But if participating in VC funding is not your style, here are five reasons why you should be an angel investor in Indonesia today.
1. Currently valuation is still low
Although it is still in its early stages, the startup ecosystem in Indonesia is maturing. This means that it is relatively easy to find a new technology company that requires $ 500,000 (Rp6.4 billion). However, you will find it difficult to find startups that require $ 5 million (Rp64 billion). The next three to four years will be an exciting opportunity for anyone with the money and want to fund a promising startup startup. Many VCs in Indonesia determine the funding value of approximately USD200,000 to USD300.000 and call it a pre-A series investment. Others refer to it as initial funding. But regardless of the title you give, the amount of current technology startup technology Jakarta is not "too big" for those of you who want to try.
Of course, valuations in Indonesia will continue to increase in the coming years, and some of the announced investments have the potential to manipulate valuation values in certain verticals. For example, e-commerce, the benchmark of how much cash to invest in a start-up company would have been affected by Tokopedia news that earned $ 100 million (IDR1.3 trillion) from Sequoia Capital and SoftBank or Lippo Group funding MatahariMall for USD500 million (Rp6 , 4 trillion).
2. A potential bootstrap startup that solves the real problem
Indonesia has many entrepreneurs. It's not hard to find startup interesting technology that has not been funded. But unlike entrepreneurs in Silicon Valley who live in an already developed region, Indonesian startups solve more fundamental problems. As a developing country, Indonesia has some basic problems such as the world's worst traffic, poor power lines, few options for online payments, poor logistics and uneven education due to the country's geography of thousands of islands.
If you try hard, you will most likely find some interesting companies. Some startup that overcome the problem mentioned above is HandyMantis, which runs the ojek courier service; Mimopay, a company that handles e-payment; And Zenius, an educational startup that provides learning videos.
3. The world began to look at Indonesia
Technology investment consulting firm in Indonesia, Redwing Asia, said:
Viewed from a macro and micro perspective, Indonesia continues to experience economic growth in various sectors and rapid changes in consumer behavior along with increasing prosperity reaching all levels of society. This is an opportunity for foreign institutions to pay attention to the emerging investment prospects in Southeast Asia's largest economy market.
Basically, big companies around the world are starting to look at Indonesia. The size of Indonesia's large market and economic growth is the first thing that attracts investors. However, another important thing to note is the exit technology startup in the form of an IPO on the Indonesia Stock Exchange does not exist yet. Since no Indonesian technology startup has reached the IPO, a more likely scenario is acquisition. This is mostly done by foreign companies.
4. Big companies are heavily bet on e-commerce
Rocket Internet combines Lamido with Lazada. HappyFresh food delivery service is launched in Jakarta and Kuala Lumpur. SingPost and Trikomsel announced their own e-commerce joint venture, and local business directories IndoTrading got USD1.5 million (Rp19.5 billion) from a group of international investors. All of these events occurred in the last 30 days. You could say e-commerce is the fastest growing vertical in Indonesia. According to aCommerce e-commerce solution provider, e-commerce kicked off traditional value chain. This new model requires that every channel has a clear added value. E-commerce can also be used to reduce the inequality of prices of staples throughout Indonesia.
According to McKinsey and Co., the number of online transactions in Indonesia is projected to grow 10-fold in the next few years. While the value per transaction is projected to grow fivefold in the next five years. This is the right time to invest in an e-commerce company. However, unless you have very much money, you may be able to glance at lesser-known companies than common names like Tokopedia or Bukalapak. You can visit local incubators and co-working spaces like GEPI, Kejora, and Conclave to hunt for potential e-commerce startup.
5. Great opportunities for owners of capital that also understand the startup aspect
It is true, there has never been a better time to become a tech investor angel in Indonesia. You have money, but do you have any knowledge of this domain? Abundant opportunities in Indonesia are accompanied by challenges and risks. This means you need to understand the market before disbursing your money. Angel savvy investors also need a great adviser, so it's important for you to identify who knows the realm you want to enter. Some important things you should consider include: Has the person been successful as an investor or an entrepreneur? How long have they become players in this realm? Who pays their salary?
Redwing Asia added, "More low profile and quieter than China and India, Indonesia offers spectacular opportunities for tech investors who want to enter a market that is expected to exceed German and British sizes within two decades."
source : id.techinasia.com