Indonesia FinTech Report 2021 – By MEDICI

For the past many years, Indonesia has been topping the FinTech leaderboard in Southeast Asia. Indonesia has the most thriving FinTech sector, be it the number of startup enterprises or the massive private investments that the sector attracts. Against this backdrop, MEDICI has recently launched a new comprehensive study titled ‘Indonesia FinTech Report 2021.’ In this article, we share some snippets from the report.

FinTech Funding Trend in Indonesia

The country has over 300 FinTechs. The three-year period (2018–2020) considered for the report witnessed over $849 million in investments in the FinTech sector. Super app Gojek raised $5 billion in various rounds during this period. However, we have not considered these rounds under FinTech funding as the amount was used for the overall development of the Gojek ecosystem, which includes its digital wallet GoPay. According to MEDICI’s analysis of the market over the last three years, there has been a steady growth in FinTech funding in Indonesia.

A detailed analysis is available in our Indonesia FinTech Report 2021. You can access the full report here.

According to MEDICI’s report, 2020 was a defining year for FinTech funding in Indonesia with over 77 deals garnering $329 million, the highest ever. The Payments sector raised the highest amount of money ($158 million). Digital wallet LinkAja closed the most significant fundraising round (Series B) at $100 million. The year 2020 was favorable for the Lending sector in terms of the number of deals (7). However, the sector was able to raise only $94 million, which pales in comparison to the $301 million raised in 2019. InsurTech also registered significant funding ($68 million) mainly because of the $54 million raised by PasarPolis as part of its Series B round.

A detailed analysis is available in our new Indonesia FinTech Report 2021. You can access the full report here.

Segment-Wise Distribution of FinTech funding

FinTech companies in the growth stage (Series B and Series C) raised almost 84% of the total funding in Indonesia last year. LinkAja, PasarPolis, Payfazz, Modalku, Investree, and Ayoconnect were some of these companies. The number of early-stage (Seed and Series A) deals declined by nearly 50%, from 20 in 2019 to 11 in 2021. This can be attributed to investors' risk-averse nature toward new players, owing to the COVID-19 pandemic. 

The Indonesia FinTech Report 2021 provides a detailed analysis of the FinTech segment-level composition of the Indonesian FinTech landscape. You can find the report here.

FinTech Consolidation

M&A deals are slowly increasing in the FinTech sector in Indonesia. In 2020, Gojek, Indonesia’s most successful Unicorn, purchased point-of-sale (POS) and payments aggregator Moka for $130 million; this purchase was one of the biggest deals in the sector. Moka provides POS and payments services to over 35,000 outlets in more than 100 Indonesian cities. With this acquisition, Gojek has now entered the payment acceptance space. In the same year, online investment platform FUNDtastic acquired Invisee, a mutual funds and securities portal, for $6.5 million. This acquisition of Invisee, a mutual fund selling agent (APERD) licensed by the Financial Services Authority (OJK), would allow FUNDtastic to directly sell mutual fund products. In 2019, stock trader platform Stockbit acquired mutual fund app Bibit and relaunched the latter as a robo-advisory platform. The M&A space will be keenly watched as companies try to identify potential competitors and allies in new segments for acquisitions or partnerships.

With a young population (the median age is 30.2 years) eager to adopt digital technologies, Indonesia is poised to become one of the world’s largest FinTech ecosystems. There are many untapped markets such as insurance, as only 2% of Indonesians have private insurance and just about 2% of Indonesians have participated in the stock market. These are the sectors that will attract the most amount of interest going forward. Besides, the country is home to 63 million small and medium enterprises. Companies looking to digitize their operations and thereby improve their productivity will also catch the eye of investors. A young working population and an economy focused on digitization will ensure that FinTech adoption in Indonesia reaches newer heights. 

About the Report

In February 2021, MEDICI published the Indonesia FinTech Report 2021, a comprehensive study based on MEDICI’s proprietary FinTech data of thousands of startups, deep market intelligence derived from years of tracking the FinTech industry, and secondary research that was refined through brain-storming sessions and in-depth interviews with segment experts to extract valuable market signals from the noise, identify market trends, and develop viewpoints for the report.

What More to Expect from the Indonesia FinTech Report 2021 by MEDICI

This 54-page report by MEDICI takes an in-depth look at the following:

  • FinTech Funding in Indonesia – Total funding and segment-wise funding break-up 
  • Overview of regulation 
  • Bank and FinTech partnerships
  • Impact of COVID-19 on the FinTech landscape
  • FinTech consolidation – M&A analysis
  • Open banking and financial infrastructure APIs
  • Rise of B2B FinTech (covering WarungTech)

A segment-level deep dive analysis covers the following:

  • WealthTech
  • Lending
  • InsurTech
  • Payments
  • B2B FinTech

Grab your copy of the full report here.