Technology has been transforming and revolutionizing everything we know and use every day, especially in the last few years and specifically in financial services. Fintech began its ascent to a golden territory with staggering global growth with 80% of all Fintech investments being carried out in just 5 years. While it has been an outstanding improvement in the industry just a few from that spectrum are the ones that are called the greatest in terms of valuation: Unicorns ($1 billion to a $10 billion valuation), Decacorns (more than a $10 billion valuation) and Hectocorns (more than a $100 billion valuation), that are now known by thousands of people. But today, we will focus on Unicorns, and to make it better, we will center on Indonesia, a country that has been topping the leaderboard in Southeast Asia. Accessible loans without collateral, cash to cashless transactions, reach of technology in the most remote areas and the population itself have made Fintech a part of Indonesian day-to-day life. Therefore, customer growth and rising revenue have skyrocketed making the companies gain a valuation of more than $1 billion, calling them Unicorns.
Below, we share with you a breakdown of the full list of Fintech Unicorns in Indonesia:
In 2010, Gojek was founded in Jakarta as an app which offers a variety of services from payments, food delivery, transportation, and logistics. This app includes food ordering, commuting, digital payments, shopping, hyper-local delivery, getting a massage, and other services.
One of the leaders of the Indonesian payments industry and accepted in more than 300 cities, Ovo’s valuation is around $2.9 billion. A platform that let its users access digital payments, cash in or cash out, make investments and so much more.
Leading the Indonesian Business to Business (B2B) payments industry, Xendit’s valuation is around $1 billion. Known for its simplicity and world-class customer support, Xendit offers a fast integration to enable companies to accept payments from credit/debit cards, E-wallets, online installments and more, in Indonesia and the Philippines.
Ajaib is an 3-year-old investing platform based in Indonesia that allows Indonesian citizens to put and call stocks, ETFs, and mutual funds. The company aims to let everyone to have an access for all investment instruments safer, faster, and cheaper.
Akulaku, often referred to as a “BNPL unicorn” is a banking and digital finance platform that provides a variety of virtual payment services.
Tokopedia, considered the most significant e-commerce in Indonesia, is a tech company that provides a C2C business platform for buyers and merchants.
What have the Investments in Fintech been in Indonesia?
Since 2006, Fintech growth in Indonesia has been rising exponentially with the usage of smartphones and the internet, according to data released by Bank Indonesia. Peer to Peer (P2P) lending, Payments, E-commerce, and adoption in Crypto assets have been the main focus in Indonesian Fintech companies.
The trends indicate that E-commerce and Healthcare are the sectors in which Fintech is focusing its efforts, because of the population needs of goods at home, the rise of contactless delivery, and the high use of health-tech since the Covid-19 Pandemic started.
It’s remarkable and interesting how Fintech has thrived during the current sanitary situation, playing a great role in the Indonesian market, accumulating almost $7.84 billion in loans as of July. Companies are staying alert to the rising non-performing loan ratio (NPL), though, this ratio measures the effectiveness of the Fintech lending companies in receiving repayments on its loans.
How many Fintech Unicorns does Indonesia have?
Known as one of the Unicorn producing countries, at the moment, Indonesia has 6 Fintech Unicorns, described above, in different sectors/industries. Gojek and Tokopedia (2 more Unicorns) were left out of this list because of the recent merger they had, becoming a company valued at around $18 billion (Decacorn). J&T could be excluded as well, because is now based in Malaysia, but decided to keep it because has its roots established in Indonesia.
Compared to other Southeast Asian countries located next to Indonesia, Singapore is the most competitive one, having big names under the radar, like Lazada (owned by Alibaba), and also having the biggest valued companies, escaping the Unicorn scope because they’ve turned into Decacorns (Grab and Razer) and Hectocorns (Sea). Thailand and Vietnam remain laggards in terms of the number of Unicorns, but still are present in the industry, with companies like Ascend Money (Financial Services) and Sky Mavis (Video Game Developer), respectively.
Which Fintech Sectors have the most Fintech Unicorns in Indonesia?
As we can see in the information above Digital Payments and E-commerce have the most Unicorns in Indonesia. In the first industry, while both companies have different customer targets, one focusing on B2C and the other on B2B, they share similar products, one of them having larger scalability for their target. While in the second industry the Unicorns have different sizes and products, they approach the consumer directly.
It is known that Indonesia has a lot of unbanked population and that’s why Fintech has evolved so quickly. The impossibility of banks to reach the unreached left a big gap for Digital Payments firms to take advantage of, as well as E-commerce firms. They have managed to position themselves where usual non-tech companies couldn’t, by providing the population products that they wanted available at their doorsteps.