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<h4 style="text-align: justify;">Like other tech sectors around the world, Indonesia has already been through a number of phases of hype, boom and realism. At the moment it's in a realism phase, with a number of larger investors entering the market to build companies which can take advantage of long-term growth trends. In parallel with this, the Indonesian tech ecosystem continues to mature, with incubators, startup communities, tech news sites and regular business plan competitions all serving to raise the level of capability among the tech entrepreneurs.</h4>
<h5 style="text-align: justify;">A rapidly-maturing sector with three distinct types of startups</h5>
<p style="text-align: justify;">The tech sector in Indonesia began a sustained growth drive in 2010, signalled by the formation of the first Indonesia-focused VCs and a significant rise in the volume of investment deals. With the formation of a number of startup incubators in 2011, plus greater sector awareness through online news sites such as Daily Social, TechInAsia and e27, a healthy ecosystem has been firmly established.</p>
<p style="text-align: justify;">Startups in Indonesia come into being through four distinct routes:</p>

<ul style="text-align: justify;">
	<li><strong>Independent incubation</strong>: independent incubators such as Ideosource, Batavia and InvestIdea provide a mix of funding, mentoring and facilities to help entrepreneurs turn their ideas into potential businesses.</li>
</ul>
<ul style="text-align: justify;">
	<li><strong>Corporate incubation</strong>: incubators tied to larger companies or funds (examples are Grupara/Medco, MerahPutih/GDP Ventures and Mega Media/Indosat) all provide startups with similar services to the independent incubators, but with a potential route into a larger funding entity within the same group.</li>
</ul>
<ul style="text-align: justify;">
	<li><strong>Bootstrapping</strong>: self-sufficient founders can pull together the right mix of skills and initial funding themselves. Typically the founders will be:</li>
</ul>
<p style="padding-left: 30px; text-align: justify;">- Entrepreneurs on their second or third Indonesian startup (increasingly common these days)</p>
<p style="padding-left: 30px; text-align: justify;">- Indonesians returning home after studying and working abroad</p>
<p style="padding-left: 30px; text-align: justify;">- Local graduates who want to try something outside the corporate life</p>
<p style="padding-left: 30px; text-align: justify;">- Foreigners who come to Indonesia and discover a tech opportunity</p>
<p style="padding-left: 30px; text-align: justify;">- Foreigners with an overseas website who find that many of their early users are from Indonesia</p>

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	<li><strong>Well-funded startups</strong>: these take a variety of forms, from startups begun by investment funds (eg Blibli/GDP Ventures), startups begun as an Indonesian/foreign JV (eg Rakuten Belanja), startups begun by Indonesian corporates launching digital businesses (eg Gramediana/Kompas), or startups funded by foreign investors (eg Lazada).</li>
</ul>
<p style="text-align: justify;">A common view among investors is that one of the most difficult challenges in tech investing in Indonesia is finding the right skills and experience in both the technical and commercial managers of the business. This perceived shortage of skilled resources has directly led to the formation of the numerous incubators in Indonesia, and has also motivated local corporates to form joint ventures with foreign internet companies rather than trying to build their own technology platforms.</p>
<a title="Startup environment" href="http://stage.redwing-asia.com/startups/startup-environment/">[Read the full piece]</a>