Winter for startup: Opportunity to chase profit and market in Indonesia

Sinta, news . 19 Sep 2022

Heaptalk, Jakarta — Global economic condition truly impact today’s startup environment, making the startups and venture capitalists (VCs) shift their strategy in running the business. Venture Partner at Int-6, Rexi Christopher stated that the show VCs want to witness is startups adaptability to response today’s ‘winter’.

“I think the major changes from the investors’ side, we are more careful to deploy our money. Now, we are more cautious to assess the company. We want to see how the founder can adapt to the situation. We want to see the founder who already prepares with every scenario market,” added Rexi.

In line with Rexi’s perspective, CIO at Mandiri Capital Indonesia, Dennis Pratistha stated that VCs want to see companies growing and impacting the customers positively during the pandemic and afterward. “We have to believe in what they are doing. We have to believe that they’re skilled, they can replicate the business model of their business, across different sectors,” explained Dennis. This statement implied that recently VCs are still actively inject their capital but implementing different approaches in selecting the startups.

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Focus on startup business fundamental

Some startups have proven their capability to adapt to a new situation one of which is an aquatech startup based in Bandung, eFishery.

“For us, lucky enough we have been in the quite sexy sector for the investors as a consumer tech sector,” said CEO at eFishery Gibran Huzaifah Amsi El Farizy. To be able to survive particularly during the ‘winter’, Gibran and eFishery team focus on building business fundamentals rather than solely boosting the valuation growth.

Gibran delivered that at the very beginning, eFishery and many startups chased upon imaginary metrics to raise imaginary valuation to obtain imaginary status. Now that the capital is no longer cheap as 3— 4 years ago, it is a wake-up call to reconsider the strategy of running the business.

Gibran uttered, “When we reached that point, then it is a wake-up call for us. Maybe we build the wrong way and the business supposes to make money and generate cash. Thus, we need to change that mindset.”

Founders need to think about changing the business flow to generate cash. Gibran suggested startups should capture the value provided by the products and services offered to the customer to make the business profit.

Likewise, a social commerce platform startup, Super, started operating as an underdog 4 years ago. When almost no one is interested in making the village a target market, CEO at Aplikasi Super Steven Wongsoredjo believes the other way that rural has great market potential.

He said, “Whenever I pitch to the VCs they were saying that we’re launching and making your life hard to launch this in East Java and East Indonesia. Just come back to us and launch in Jakarta and stuff. But I always have the conviction that the rural area in Indonesia has a huge opportunity.”

Being underdog from the beginning makes Steven works hard to build the business as he can not take money for granted. He delivered that the Super team is not afraid of competitors might race war as this market is huge. By having those attitudes since it is early established, Super has converted monthly users rapidly to grow the GMV. “We have raised series B in 2021 and series C at the beginning of this year,” said Steven.