The Tracxn Geo Annual Report: Indonesia FinTech 2023, based on our extensive database, provides a round-up of funding and other major developments in Indonesia’s FinTech space.
The Indonesian startup ecosystem is the second highest-funded startup ecosystem in the SEA region in terms of overall funding and also the 2nd largest economy in the SEA region. However, funding in the Indonesian FinTech space in 2023 has fallen by 51% when compared with 2022. Investors are still taking cautious steps due to the global macroeconomic slowdown and other geopolitical issues.
The Indonesian FinTech space raised a total of $765 million in 2023, a decline of 51% from the $1.6 billion raised in 2022. Seed-stage funding stood at $9.5 million in 2023, a plunge of 84% compared with the funds raised in the previous year. Early-stage funding fell 79% to $99.4 million in 2023 from $466 million in 2022. Companies in this space secured late-stage funding worth $656 million in 2023, marking a 40% decrease from $1.1 billion in 2022.
In terms of quarter-wise comparison, there was a decline in funding in the second and third quarters of 2023, but there was an uptick in Q4 2023. Funding worth $312 million and $407 million was observed in Q1 and Q4 2023 respectively. However, Q2 and Q3 2023 witnessed only $25.5 million and $21 million respectively.
The Indonesian FinTech space saw three $100M+ funding rounds in 2023, as against four such funding rounds in 2022 and six rounds in 2021. Investree, GoJek & Kredvio were the companies that attracted funding above $100 million in 2023. Further, no new Unicorns emerged from this space in 2023.
Alternative Lending, Payments, and Banking Tech were the top-performing segments based on funding during the year. Alternative Lending companies attracted investments worth $554 million in 2023, 82%higher than the $305 million raised in 2022. The Payments segment secured total funding of $217 million in 2023, a 67% drop when compared with the $659 million raised in 2022. The Banking Tech space witnessed a total of $8.5M, an 81% drop compared to $44.2M raised in 2022.
The overall Indonesian FinTech sector witnessed four acquisitions in 2023, similar to the scenario in 2022, but slightly lower than the 5 acquisitions recorded in 2021. HomeCredit, an Alternative Lending company, was acquired for $219 million by Krungsri, Adira Finance and MUFG.
East Ventures, Mandiri Capital Indonesia & AC Ventures were the overall most active Investors till date in the Indonesian FinTech sector. 500 Global, Hustle Fund & Mandiri Capital Indonesia were the top investors in the seed stage in 2023, while Gobi Partners, Alpha Trio & Openspace Ventures were the most active early-stage investors.
