Opportunities for Indonesian Startups Amid the Tech Winter
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JAKARTA — Jakartaweekly.com. The end of the global “tech winter” remains uncertain, causing investors and venture capital firms to become increasingly cautious in selecting startups to fund. In Indonesia and Southeast Asia, the current environment has pushed many startups to prioritize efficiency, profitability, and sustainability over rapid expansion.
Tech winter refers to a period of tighter funding conditions driven by rising interest rates, geopolitical uncertainty, and broader macroeconomic pressures that increase the cost of capital. As a result, investors are becoming more selective and focusing on startups with clearer business fundamentals and stronger long-term potential.
The Indonesia Startup Report 2026 from DiscoveryShift, supported by GarudaSpark Innovation Hub under Indonesia’s Ministry of Communication and Digital Affairs, noted that the decline in startup funding reflects tightening global liquidity and rising US interest rates rather than a structural weakening of Indonesia’s digital economy.
The report also highlighted that although total funding has declined sharply compared to the 2020–2022 boom period, later-stage funding remains relatively resilient, with several large Series B and Series C deals absorbing most of the available capital.
Data from the report shows that around 67 percent of startup deals occur at the early stage, but only 15 percent of seed-stage startups successfully advance to Series A funding, reflecting increasingly intense competition and stricter investor selection.
In terms of sectors, New Retail, Fintech, and E-commerce continue to dominate capital flows throughout 2025.
Beyond tightening capital flows, Indonesia’s startup ecosystem is now facing another challenge: growing concerns over corporate governance and founder accountability.
Over the past few years, the industry has been hit by mass layoffs, startup shutdowns, and aggressive cost-cutting measures as companies struggled to survive the funding slowdown. Initially, much of the pressure was attributed to macroeconomic conditions, including rising interest rates and changing global investment trends.
However, the conversation has increasingly shifted toward leadership quality and governance standards within startups themselves. Several high-profile controversies involving startup founders and management teams have sparked broader discussions about transparency, accountability, and sustainability in Indonesia’s digital economy.
The growing scrutiny suggests that the industry’s challenges are no longer solely financial. Investors, employees, and consumers are now also paying closer attention to how startups are managed and whether leadership teams are capable of building resilient businesses during uncertain market conditions.
According to Elisabeth Kurniawan, angel investor, investment opportunities in Indonesia’s startup ecosystem still remain attractive despite the cautious market environment.
“Investors are now looking beyond growth narratives. The focus today is more on sustainable business models, profitability, and founders who are able to navigate uncertainty,” Elisabeth said in an interview.
She explained that one of the most important factors in evaluating startups is the quality of the founders themselves.
“Companies go through different seasons, but strong founders remain fundamentally important. Grit, perseverance, optimism, and flexibility in steering the company through uncertainty are critical,” she said.
Elisabeth added that investors are also paying closer attention to whether startups are solving meaningful and manageable market problems.
“Every company faces challenges, but there are solvable problems and unsolvable ones. Businesses that already have proven demand and only need capital support to scale operations are generally healthier investment opportunities,” she explained.
According to Elisabeth, investors remain cautious because many startups previously prioritized aggressive expansion and top-line growth without building sustainable profitability.
“My investment thesis is not about growing fast at all costs, but about the bottom line, EBITDA, and profitability growth year-on-year,” she said. “Revenue growth is important, but retention, cost management, and operational discipline matter even more in today’s market.”
On sectors with strong opportunities in Indonesia, Elisabeth said she sees continued potential in direct-to-consumer (D2C) businesses and consumer brands targeting middle- to upper-income consumers.
“There is still room for growth in the middle-to-upper market as disposable income in these segments continues to increase steadily,” she said.
For startups navigating the challenging funding environment in 2026, Elisabeth believes companies should focus more on strengthening relationships with existing customers instead of pursuing expansion too aggressively.
“Startups should focus on increasing customer retention and loyalty rather than only focusing on expansion and growth,” she said. “That’s my personal observation based on what has been happening in the market.”
Despite the ongoing tech winter, Elisabeth remains optimistic that strong Indonesian startups with disciplined business models and resilient leadership will continue to attract long-term investment opportunities.