Funding for startups in Indonesia has seen a drastic decline\nthroughout 2025. This phenomenon is attributed to a weakening of\ninvestor confidence in the domestic digital business ecosystem compared\nto neighboring countries.<\/p>\n
Foreign investors are now more inclined to invest in Singapore. A\nreport from the Southeast Asia Startup Funding Report 2025, released by\nDealStreetAsia, confirms this regional disparity in investment\nallocation.<\/p>\n
Throughout the period, total startup funding in Indonesia reached\nonly US$340 million, equivalent to Rp5.72 trillion, or just 6.3% of the\ntotal investment value for startups across Southeast Asia.<\/p>\n
1. Singapore\u2019s Dominance in Funding<\/strong><\/p>\n Investment figures in Indonesia still lag significantly behind\nSingapore. Singapore dominated startup funding in Southeast Asia\nthroughout 2025.<\/p>\n The report details that Singapore recorded 283 startup funding\ntransactions, with a total funding value of approximately US$4.20\nbillion, or Rp70.75 trillion, during the period.<\/p>\n This significant difference in funding signals a need for\ncomprehensive regulatory improvements to attract venture capital from\naround the world and revitalize the investment climate for technology\ncompanies in Indonesia.<\/p>\n 2. Regional Financial Ecosystem Hub<\/strong><\/p>\n Economist at the Center of Economic and Law Studies (CELIOS), Nailul\nHuda, analyzed this phenomenon. According to him, Singapore has become\nthe primary financial hub in Southeast Asia for many multinational\ndigital companies.<\/p>\n The mature financial ecosystem makes it attractive for large\ntechnology companies to establish their headquarters there. \u201cCompanies\nlike Meta and Google have their Southeast Asian headquarters in\nSingapore,\u201d said Nailul Huda.<\/p>\n In addition to large technology corporations, many global Venture\nCapital (VC) firms have also chosen Singapore as their hub. The\nfavorable regulations make these venture capitalists feel more secure\nand comfortable operating their businesses in the country.<\/p>\n 3. Strategy for Accessing Global Funding<\/strong><\/p>\n The higher investor confidence in Singapore has forced startups to\nadapt. Many Indonesian startups have established joint ventures legally\nbased in Singapore to facilitate access to foreign funding.<\/p>\n Venture capital often passes through Singapore before entering the\ndomestic market. \u201cThere are several rules and incentives in Singapore\nthat make development there more advanced than in other countries,\u201d\nexplained Nailul Huda.<\/p>\n Financially, Singapore\u2019s business climate offers the regulatory\ncertainty that large investors seek. Investment flows from venture\ncapitalists generally pass through Singapore before gradually flowing\ninto Indonesia or Malaysia.<\/p>\n 4. Shift in Funding Trends<\/strong><\/p>\n In terms of funding stages, the recovery in transactions during the\nsecond half of 2025 has shifted significantly. The majority of funding\nis now focused on later-stage funding, which typically requires more\nmature business fundamentals.<\/p>\n Conversely, the volume of early-stage funding transactions has\ngradually decreased. This sharp decline in the second half of the year\nhas significantly impacted the Indonesian startup ecosystem, which has\nlong relied on early-stage funding.<\/p>\n This shift in global investor risk appetite poses a significant\nchallenge for local founders. Domestic startups are urged to quickly\nachieve clear profitability to survive the threat of funding liquidity\nin the future.<\/p>\n 5. Prospects for the Rise of Financial Services<\/strong><\/p>\n Throughout 2025, Southeast Asia saw the emergence of only four new\nunicorn startups. The majority of these companies with valuations above\nUS$1 billion are based in Singapore, not Indonesia.<\/p>\n The four new unicorns are Ultragrn.ai, Synut, Thunes, and Ashita\nGroup. They are actively involved in key strategic sectors such as green\ntechnology, cross-border payment services, and integrated manufacturing\nand trading industries.<\/p>\n Despite the lack of new unicorns, there is great hope for the\ndomestic digital financial services sector in the future. \u201cThe financial\nsector, such as digital banks, Buy Now Pay Later (BNPL), and online\nlending, can still support our digital ecosystem,\u201d he concluded.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/indonesian-startups-struggle-to-secure-funding-as-singapore-attracts-investment-1772083566",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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