How Strong is the Startup Ecosystem in Jakarta in Facing the Crisis?

TheIndonesia.co - BNI Ventures CEO Eddi Danusaputro thinks Jakarta as the capital city of Indonesia is still an ideal ecosystem for the growth and development of startups. It is still strong amid the threat of a global crisis.

According to him, the development of this startup is in line with the Jakarta Government's program to strengthen the digital ecosystem to develop micro, small and medium enterprises (MSMEs) as the backbone of the economy.

"Recently through the pandemic, the strength and sustainability of startups here were tested by the leaking of the startup bubble in the world. This phenomenon is marked by several startups simultaneously laying off a large number of employees," said Danusaputro in a statement in Jakarta, Wednesday, August 10, 2022.

Danusaputro suspects that the bubble leak is due to the dependence of startup companies on funding from venture capitalists. Efficiency through the reduction of employees was forced to be done when investors tightened the disbursement of funds.

"Startups that have not yet made a profit need to do this because they need to extend their survival period to try to generate revenue," said Danusaputro in a media discussion.

The startup population in DKI Jakarta and other big cities in Indonesia based on data in 2022 reached 2,346 or the fifth largest in the world. The sectors they work on are also diverse, but the most popular are transportation, finance, education, and health, all of which are online-based.

According to research conducted by Google, Temasek, and Bain&Co in 2019, Indonesia became the country with the most startups receiving financing compared to other countries. This funding figure is expected to remain the highest in 2025.

Under these conditions, Indonesia's digital economy in 2019 has more than quadrupled its size since 2015 with an average growth rate of 49 percent per year. Its value is estimated at 40 billion US dollars. With this number, Indonesia became the country with the best digital economic growth in Southeast Asia in 2019.

Danusaputro added that it is important for many parties, from startup owners, capital owners, and the government to provide education to build healthy startups both financially and in management.

"With healthy startups, we can also maximize potential and build a strong Indonesian digital ecosystem. Not only that, when all parties have tried to create healthy startups, we can prevent a financial crisis on a national scale," said Danusaputro.

A similar same comment was conveyed by Aqsath Rasyid as CEO of NoLimit Indonesia, a technology startup that focuses on monitoring and analyzing online media using big data technology. He said healthy startups are not only focused on capital or large investments that come from outside the company.

"All startups can start running the company with what capital they have. The most important thing is that startups have consistency and resilience in facing challenges," said Rasyid.

“We operate as a startup without external capital (bootstrapping) and grow and develop very organically. By utilizing internal capital, we are still a healthy startup and exist today," said Rasyid.