The year 2024 will witness both a bull and bear market, opined executives of top Indonesia-focused VC Funds who spoke at a public panel discussion titled ‘Investment Outlook 2024’ on Thursday in Jakarta.
The speakers were unanimous that while things may get worse initially, the second half of the year is expected to be better.
“Only the most committed founders will come out strong after 2024,” said Abraham Hidayat, the managing partner of Skystar Capital, one of Indonesia’s earliest VCs that has backed more than 50 companies and exited more than 10.
Skystar manages two funds, which are backed by limited partners (LPs) such as the Indonesian conglomerate Kompas Gramedia and the Saratoga family. Some of its portfolio companies are Carro, Fuse, JULO, Rekosistem, and Komunal.
“While 2024 is an election year and there are jitters around the country, Indonesia is doing relatively well compared to the global market. If commodity prices remain high, the economy will continue to be better,” said Anthony Tjahjadi, founding partner at Trihill Capital.
Trihill Capital is a multi-asset investment fund which does global public equity investments and SE Asia VC investments. It has investments across the US, China, and Asia. Some of its portfolio firms include Sicepat, wagely, and Fit Hub.
“While 2021 was about growth, followed by the shift to chasing profitability in 2022 and 2023, sustainability is set to be the key success mantra of 2024,” said Ferdy Nandes, General Manager, Aspire.
Aspire is an all-in-one finance management company that raised more than $100 million from Lightspeed and Sequoia in February 2023.
“A lot of investors are becoming selective in bets that investors are making, and while liquidity is there, they are still waiting… but I feel they are also waiting for the new normal of having founders think about product market fit at an earlier stage,” added Patrick Yip, founding partner at Intudo Ventures.
Intudo Ventures, launched in 2017, is a VC firm focused on Indonesia. It is currently raising its fourth fund after closing its third fund at $115 million. Intudo Ventures told DealStreetAsia that it will have to rightsize the fund by looking at the market conditions. Some of its investments include Xendit, Halodoc, Kargo, and Pasarpolis.
“Companies that survive this year will define the next decade of Indonesia. The key word earlier was growth and market share at all costs. The burn was believed to be ok as long there was GMV. Now we are seeing that companies have to be profitable by Series A,” added Abraham.
Speaking on the investment trends for 2024, software, climate tech, electric vehicles (EVs), and greentech are expected to grow in 2024. Moreover, operating systems for SMEs, B2B, and digital immigrants like D2C and fintech and consumer and traditional sectors will see rising interest in 2024.
For Trihill, revenue-generating businesses like consumer D2C retail and trading businesses present opportunities.
“For investors like us, looking for more revenue-generating businesses is where we are more inclined and where they have to raise higher capex, and we are seeing a shift in companies like ours in traditional business since the customer base is inclined to traditional products. Although raising a higher capex is a challenge,” Anthony told DealStreetAsia, adding that Trihill Capital is shifting its focus to more traditional consumer sectors.