Fintech growth in Indonesia remains robust and gathers momentum
Indonesian Fintech Sector Thrives Amidst Global Challenges
The fintech sector in Indonesia has experienced significant growth over the past couple of years, with numerous startups making headlines for their impressive achievements. Despite a global slowdown in fintech funding, Indonesian fintech companies continue to attract investors, as evidenced by the numerous big-ticket deals this year.
One of the standout success stories is Dana, a digital wallet service. In the first half of 2021, Dana reported a 40% increase in digital wallet users, growing from 50 million in December 2020 to 70 million. Another local startup, Akulaku, also saw booming adoption, reaching unicorn status in 2021. Akulaku disbursed over US$2.2 billion of credit in 2021 to over 10 million users.
Buy now, pay later (BNPL) arrangements have also seen a surge in popularity. Akulaku's success is not an isolated case, as several other soonicorns, such as LinkAja, Bibit Tumbut Bersama, and BukuKas, account for 34.5% of the total valuation of Indonesian fintech startups. Ovo, Akulaku, Xendit, and Ajaib account for half of the total valuation, with Ovo alone having a valuation of over US$7.4 billion.
The value of transactions using electronic money and QRIS, Indonesia's QR code payment standard, also grew substantially in 2021. The value of transactions using electronic money grew by 49%, while the value of transactions using QRIS grew by an impressive 237% year-on-year.
The growth of the fintech sector has also had a positive impact on the Indonesian stock market. As of September 2021, 6.4 million individual identity investors participated in the Indonesian stock market, a 156% increase from the end of 2019. Local wealth management mobile app Pluang has also witnessed a 22 times growth in monthly transacting users between January 2020 and November 2021.
Consumer payment platform Flip announced a second close of its Series B, bringing its total funding in that round to over US$100 million. Razer Fintech, the fintech arm of gaming company Razer, also expanded its footprint in Indonesia by buying PT E2Pay Global Utama (E2Pay) to expand its footprint in Indonesia.
The founders of the Indonesian fintech startups with a combined valuation of 14.8 billion USD in 2022 include Ferry Unardi and his co-founders Albert and Derianto Kusuma, who together founded Traveloka, a major Indonesian travel and fintech platform.
However, the fintech sector is not without its challenges. The total number of crypto investors in Indonesia has doubled in the past year to more than 12 million people. Yet, no new facts about the growth of the Indonesian stock market or the number of individual identity investors were mentioned in this paragraph.
In conclusion, the fintech sector in Indonesia is thriving, with numerous startups making significant strides in digital wallet services, BNPL arrangements, and wealth management. Despite global challenges, Indonesian fintech companies continue to attract investors and expand their footprint both domestically and overseas.
