East Ventures will implement the same strategy for this year, namely by strengthening strategic cooperation with EV portfolios in mapping their situations to reduce layoff issues.
Heaptalk, Jakarta — The global economic turbulence has made East Venture, a growth-stage venture capital firm, more selective in pouring a large amount of funds. Realizing the vast layoff trends worldwide, the Partner of East Ventures, Melisa Irene, affirmed the founders should comprehend this business cycle around the startup ecosystem.
“We could not estimate whether the layoff storm will continue this year. However, we will navigate 2023 similarly to the previous years by strengthening strategic cooperation with EV portfolios in mapping their situations. We always believe that the outstanding founders could utilize a good situation to go through the complex conditions, one of which is the termination issues,” Melisa Irene said.
Nevertheless, Indonesia‘s venture capital firm also mentioned that several startup founders are set up not to generate a profit from the early day. They focus on grabbing investment potential to develop the products, customer acquisition, and discover the product market fit in the early stage. Meanwhile, related to business profitability, this investment firm revealed that the scheme has different timelines. For this reason, startup founders must go through several funding rounds to reach business profitability.
Yet, several external factors that changed rapidly impacted the plummet of the public market in the United States had also affected the company’s whole valuation value, particularly Indonesia’s startups, who generally compared valuations with the United States public market. On the other hand, the presence of the denominator effect also makes the investors stop pouring capital into the startup, as a higher valuation from the public market.
Despite the terrible prediction of a gloomier global economy, East Ventures keep amplifying its philosophy to pour capital into the startups by focusing on the People and Potential Market to invest in seed startups.
East Ventures suggested that the new founders carry out their outstanding integrity, high self-awareness, and paradoxical trait to minimize a layoff trend. Irene believes the founders would establish a strong business with specific targeted markets by amplifying these characteristics.
“We have robust confidence that an excellent team would create an outstanding product to make the company develop more quickly. Meanwhile, for the growth stage investment, we will continue to focus on the traction scheme,” Irene added.
According to Irene, Indonesia’s digital economy continues to show significant growth, marked by internet penetration, infrastructure, and digital adoption among society. For this reason, East Ventures has robust confidence the layoff storm will subside as the new founders have a mature plan to develop the business.
“We believe the business potential of each industry still possesses vast capabilities. Moreover, Indonesia and Southeast Asia’s digital economy continues to demonstrate positive output. By embracing skillful founders, we believe 2023 is the race in the perfect storm momentum,” said Irene.
