AC Ventures (ACV), Indonesia’s leading early-stage venture capital firm, and Boston Consulting Group (BCG) jointly released one of the most comprehensive reports to date on Indonesia’s fast-growing FinTech sector. The report’s launch took place at The Langham Hotel in downtown Jakarta.
The report is titled “Indonesia’s FinTech Industry is Ready to Rise.” It charts the progress of financial technology in the country across multiple subverticals. This starts from the inception of FinTech startups and the local digital economy in 2011—up until 2022. It also highlights and unpacks payments, lending, and WealthTech as the main driving forces of Indonesia’s observable FinTech ecosystem today.
Over the last decade, Indonesia has witnessed a six-fold increase in the number of FinTech players, with the count rising from 51 in 2011 to 334 in 2022. Initially, the growth was mainly driven by the payments segment. However, the FinTech landscape in Indonesia is now diverse and dynamic, with lending, payments, and WealthTech becoming clear industries of the future.
Additionally, new players in segments such as software-as-a-service (SaaS) and insurance activities are emerging. This indicates that FinTech in Indonesia is maturing and moving toward more sophisticated products and services.
FinTech offerings are also experiencing a surge in customer engagement in the nation. The payments segment, which boasted over 60 million active users in 2020, is expected to have a compound annual growth rate (CAGR) of 20%+ until 2025. In the lending space, there were more than 30 million active peer-to-peer borrower accounts in 2021. Meanwhile, the wealth segment had over 9 million retail investors as of 2022. The adoption of SaaS platforms is also growing, with 6 million SMEs currently using them, representing a 26-fold expansion over the preceding three years.
Investment trends also echo the diversification of Indonesia’s FinTech market, with lending and payments no longer being the primary areas of interest. While lending and payments remain important, there is increasing investment into WealthTech, InsurTech and FinTech SaaS.
The FinTech market is expanding rapidly, with emerging players alongside established ones. Equity is targeted based on an operator’s or vertical’s maturity. Early-stage funding deals are receiving over 80% of the total invested capital. Funding from 2020 to 2022 reached USD $5.4 billion, 2.7 times more than the period of 2017 to 2019. Growth and monetisation are the main focus in series D+ funding rounds.
In light of the current economic climate, investors are now looking for clear paths to profitability before a series D. More than 80% of FinTech deals done from 2020 to 2022 were for pre-series C funding rounds, indicating strong support for early innovation. These trends are likely to continue driving innovation and disrupting the existing financial services landscape.
Adrian Li, Founder of and Managing Partner at AC Ventures, said: “I am pleased to say that we are one of the most active investors in Indonesia’s thriving FinTech industry, which offers immense prospects for growth. The exponential rise in the number of FinTech players, burgeoning customer engagement and escalating equity funding are all indicative of the sector’s vast potential. Our investment strategy aligns with this space’s most impactful and innovative enterprises. With this joint report designed to serve the financial ecosystem at large, AC Ventures is proud to sustain its support and investment in the flourishing local FinTech sector.”
“As our comprehensive analysis shows, the FinTech scene in Indonesia is booming, underscoring the tremendous growth potential of the country’s digital economy,” said Sumit Kumar, Managing Director and Partner at Boston Consulting Group. “It’s an exciting time for innovation led by customer needs, collaboration between FinTech players and traditional financial institutions, regulatory bodies and regulatory foresight. We hope our insights will equip industry players with a deeper understanding of the FinTech ecosystem, putting them in a stronger position to seize new opportunities and gain competitive advantage.”
To read the report in full, please visit https://acv.vc/resources/.
Archive
- October 2024(44)
- September 2024(94)
- August 2024(100)
- July 2024(99)
- June 2024(126)
- May 2024(155)
- April 2024(123)
- March 2024(112)
- February 2024(109)
- January 2024(95)
- December 2023(56)
- November 2023(86)
- October 2023(97)
- September 2023(89)
- August 2023(101)
- July 2023(104)
- June 2023(113)
- May 2023(103)
- April 2023(93)
- March 2023(129)
- February 2023(77)
- January 2023(91)
- December 2022(90)
- November 2022(125)
- October 2022(117)
- September 2022(137)
- August 2022(119)
- July 2022(99)
- June 2022(128)
- May 2022(112)
- April 2022(108)
- March 2022(121)
- February 2022(93)
- January 2022(110)
- December 2021(92)
- November 2021(107)
- October 2021(101)
- September 2021(81)
- August 2021(74)
- July 2021(78)
- June 2021(92)
- May 2021(67)
- April 2021(79)
- March 2021(79)
- February 2021(58)
- January 2021(55)
- December 2020(56)
- November 2020(59)
- October 2020(78)
- September 2020(72)
- August 2020(64)
- July 2020(71)
- June 2020(74)
- May 2020(50)
- April 2020(71)
- March 2020(71)
- February 2020(58)
- January 2020(62)
- December 2019(57)
- November 2019(64)
- October 2019(25)
- September 2019(24)
- August 2019(14)
- July 2019(23)
- June 2019(54)
- May 2019(82)
- April 2019(76)
- March 2019(71)
- February 2019(67)
- January 2019(75)
- December 2018(44)
- November 2018(47)
- October 2018(74)
- September 2018(54)
- August 2018(61)
- July 2018(72)
- June 2018(62)
- May 2018(62)
- April 2018(73)
- March 2018(76)
- February 2018(8)
- January 2018(7)
- December 2017(6)
- November 2017(8)
- October 2017(3)
- September 2017(4)
- August 2017(4)
- July 2017(2)
- June 2017(5)
- May 2017(6)
- April 2017(11)
- March 2017(8)
- February 2017(16)
- January 2017(10)
- December 2016(12)
- November 2016(20)
- October 2016(7)
- September 2016(102)
- August 2016(168)
- July 2016(141)
- June 2016(149)
- May 2016(117)
- April 2016(59)
- March 2016(85)
- February 2016(153)
- December 2015(150)