INDONESIA Law and Practice Contributed by: Alvin Suryohadiprojo and Dimas Nandaraditya, KARNA
KARNA Deutsche Bank Building 17th Floor #1703 Jl Imam Bonjol No 80 Menteng Jakarta Pusat DKI Jakarta 10310 Indonesia Tel: +62 (0) 21 239 6058
Email: info@karnapartnership.com Web: www.karnapartnership.com
1. Trends 1.1 VC Market
saw the steepest decline in both deal volume and value in 2024. During this “tech winter” , Indonesian start-ups have been struggling to secure funding as investors become more cau - tious amid global economic uncertainties. Those with enough runway also avoid equity fundrais - ing due to lower valuations, and have consid - ered alternative financing options, including venture debt or conventional bank loans. This has prompted start-ups to prioritise a path to profitability. Despite this, there are still growing opportunities and activities in sectors such as healthcare, green energy and natural resources. Given the foregoing, more venture capitalists are asking for greater protections in the event of down round, including more anti-dilution rights, a higher liquidation preference multiplier, additional governance requirements and more information rights. Transaction structures remain largely similar for purely domestic players where it is mostly Indonesian limited liability company ( Perseroan Terbatas , or PT) to PT investment in Indonesia. Where transactions involve foreign venture capitalists, an offshore holding vehicle of the Indonesia company would be set up to
The decline in venture capital tech transactions has continued in the past year, where Indonesia has not seen any deal of pre-pandemic land - mark size. The closest was the USD1.1 billion public raised by GoTo in 2022, which was the third-largest IPO in Asia and the fifth largest in the world at that time. Despite this, there have been several transactions in 2024, including the acquisition of GoTo’s e-commerce platform, Tokopedia, by the giant social commerce plat - form from China, TikTok, with a transaction value of USD1.84 billion; and IPO conducted by Mr DIY, a homecare products retail company, with a total raised amount of IDR4.15 trillion (around According to the 2024 e-Economy South-East Asia Report jointly issued by Google, Temasek and Bain & Company, private funding for digi - tal businesses in the South-East Asia region remains subdued, mainly caused by higher inter - est rates and shifts in the geopolitical landscape. Deal-street Asia also reported that Indonesia USD276 million). 1.2 Key Trends
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