<img class="alignnone size-full wp-image-1524" alt="Page - Investors - Foreign investors graphic 2" src="http://redwingconsulting.com/wp-content/uploads/Page-Investors-Foreign-investors-graphic-2.jpg" width="700" height="270" />
<h4 style="text-align: justify;">Indonesia does not restrict foreign investment into the tech sector, so foreign investors have a range of options in investment structures. The most common investment strategies to date have been forming a JV with a local Indonesian company, acquiring an existing tech company, or opening a local subsidiary then hiring local employees (and sometimes bringing in overseas executives too). The foreign investors have brought both capital and skills, with investors to date coming from the US, Japan, China, Korea and Europe.</h4>
<h5 style="text-align: justify;"><strong>Indonesia has already seen two waves of foreign investments.</strong></h5>
<p style="text-align: justify;">The first wave of foreign investment, in 2010 and 2011, was fundamentally a land-grab. Indonesia experienced a mini internet boom as Yahoo, Groupon and DailySocial all made high-profile acquisitions. There was a single primary goal: to buy the leading Indonesian internet companies before someone else got their hands on them.</p>
<p style="text-align: justify;">The second wave has been more about establishing a long-term presence in the Indonesian market, rather than making outright acquisitions. The majority of transactions have been undertaken by Japanese and Chinese investors, who have tended to take a joint venture approach. However, the largest investment has come from Europe, in the shape of Rocket Internet and its six online ventures.</p>

<h5 style="text-align: justify;">The first wave: Yahoo, daily deals, and more</h5>
<p style="text-align: justify;"><img class="alignnone size-full wp-image-768" alt="Koprol-Yahoo logo" src="http://redwingconsulting.com/wp-content/uploads/Koprol-Yahoo-logo.jpg" width="147" height="41" />   <img class="alignnone size-full wp-image-907" alt="Groupon Disdus logo" src="http://redwingconsulting.com/wp-content/uploads/Groupon-Disdus-logo.png" width="99" height="42" />   <img class="alignnone size-full wp-image-790" alt="DealKeren logo" src="http://redwingconsulting.com/wp-content/uploads/DealKeren-logo.png" width="125" height="42" />  <a href="http://redwingconsulting.com/investors/foreign-investor/attachment/rumah123-logo/" rel="attachment wp-att-789"><img class="alignnone size-full wp-image-789" alt="Rumah123 logo" src="http://redwingconsulting.com/wp-content/uploads/Rumah123-logo.png" width="169" height="32" /></a></p>
<p style="text-align: justify;">With Yahoo's surprise purchase of location-based service Koprol in 2010, Indonesia was suddenly on the tech world's map. Next, a daily deals frenzy broke out, with Groupon and LivingSocial both buying the leading Indonesian companies in 2011. Somewhat overshadowed by all this, a bidding war also went on for the leading property portals, with the top three all being acquired within a space of four months.</p>
<p style="text-align: justify;">Unlike many frenzies, where the common end result is buyer's remorse, a number of these acquisitions led to seller's remorse. The daily deals market globally took a swoon, while Yahoo was having its own internal problems, so the Koprol, Disdus and DealKeren deals have not yet fulfilled their obvious potential in Indonesia. Conversely, the property portals are thriving, and reporting healthy growth rates in line with the booming internet sector.</p>

<h5 style="text-align: justify;">The second wave: establishing a beach-head</h5>
<p style="text-align: justify;">Going in to 2012, a consensus emerged among the foreign investors: Indonesia is a market where the rewards come to those who commit to the long-term development of the internet sector, but it is not a hit-and-run market. As part of broader long-term regional strategies, Google opened an office in Jakarta, Rocket Internet launched a number of e-commerce ventures, and the Japanese investor funds became significantly more active.</p>

<h5 style="text-align: justify;">The most influential foreign investors in the Indonesia tech sector currently:</h5>
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<td style="width: 165px;"><img alt="Zalora Lazada logos 2" src="http://redwingconsulting.com/wp-content/uploads/Zalora-Lazada-logos-2.png" width="160" height="120" /></td>
<td style="text-align: justify;"><span style="font-size: small;">Germany's Rocket Internet calls itself a startup incubator, but few other incubators have US$ 90 million of funding behind them.  Armed with this warchest, Rocket has launched six ventures so far in Indonesia (and others in four other SE Asia countries), from e-commerce to food delivery to price comparison sites. Its model is to appoint MBA-trained executives to run each unit, and then to hire large local teams.</span></td>
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<tr style="height: 160px;">
<td style="width: 165px;"><img alt="Rakuten logo" src="http://redwingconsulting.com/wp-content/uploads/Rakuten-logo.png" width="160" height="120" /></td>
<td style="text-align: justify;"><span style="font-size: small;">Rakuten is the world’s third largest e-commerce company, after Amazon and Taobao. It entered Indonesia in 2011, in partnership with local media company MNC, to launch online marketplace Rakuten Belanja. The site has experienced double-digit monthly growth, and eighteen months after launch boasted 400 merchants and 300,000 products offered online.</span></td>
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<td style="width: 165px;"><img alt="Netprice.com logo 2" src="http://redwingconsulting.com/wp-content/uploads/Netprice.com-logo-2.png" width="160" height="120" /></td>
<td style="text-align: justify;"><span style="font-size: small;">NetPrice.com, a Japanese internet company that is listed on the Tokyo stock exchange, became the third-round investor in Tokpedia in 2012, joining previous investors East Ventures and CyberAgent. It is also an investor in payment platform Veritrans Indonesia. Netprice operates using multiple e-commerce business models in Japan, including auctions, online group buying and cross-border trading.</span></td>
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<td style="width: 165px;"><img alt="Veritrans logo" src="http://redwingconsulting.com/wp-content/uploads/Veritrans-logo.png" width="160" height="120" /></td>
<td style="text-align: justify;"><span style="font-size: small;">Veritrans Indonesia is a joint venture between VeriTrans Inc. and Netprice.com of Japan together with local Indonesian company MidPlaza Group. Its secure online payment platform was launched in 2012 to compete with a number of other plaforms such as Doku, iPaymu and Indonesia's top two banks, BCA and Mandiri.</span></td>
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<td style="width: 165px;"><img alt="GREE Ventures logo" src="http://redwingconsulting.com/wp-content/uploads/GREE-Ventures-logo.png" width="160" height="120" /></td>
<td style="text-align: justify;"><span style="font-size: small;">GREE Ventures is the ventures arm of Japan's mobile social gaming company GREE. The fund has US$25m of which 60% is allocated to SE Asia startups. After investments in Pricearea.com and Bukalapak in 2012, GREE Ventures followed East Ventures into Berrybenka, part of the current trend towards e-commerce verticals.
</span></td>
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<td style="width: 165px;"><img alt="CyberAgent logo 2" src="http://redwingconsulting.com/wp-content/uploads/CyberAgent-logo-2.png" width="160" height="120" /></td>
<td style="text-align: justify;"><span style="font-size: small;">CyberAgent is a Japanese VC which invested in e-commerce sites Tokopedia in 2011 and Bilna in 2012, both of which are also part of East Ventures' portfolio. Within SE Asia, CyberAgent is focused primarily on Indonesia in Vietnam, with up to US$20m allocated to the two countries.</span></td>
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<td style="width: 165px;"><img alt="Google logo" src="http://redwingconsulting.com/wp-content/uploads/Google-logo.png" width="160" height="120" /></td>
<td style="text-align: justify;"><span style="font-size: small;">Google opened its Indonesia office in May 2012, and has been focused on promoting its online advertising services to small and medium sized businesses in Indonesia, as well as forming local marketing partnerships. With around 50 employees in Indonesia, compared to more than 50,000 worldwide, it fits the common pattern of a "very large global corporation which has a small business in Indonesia".</span></td>
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<h6 style="text-align: justify;"><span style="color: #999999;">Redwing strives for accuracy in its company analyses - if there are any details you would like to add to this analysis please contact us here.</span></h6>