I remember walking through Jakarta’s SCBD back in 2021. It felt like every other person you bumped into was a “Founder” or a “Head of Growth.” The energy was electric, fueled by a seemingly bottomless pit of venture capital and the intoxicating scent of “blitzscaling.” But if you walk those same streets today, the vibe has shifted. The flashy launch parties have been replaced by quiet, intense boardroom huddles. It’s not that the excitement is gone; it’s just that the hangover has finally set in, and everyone is suddenly very interested in things like “unit economics” and “EBITDA.”
According to RISE by DailySocial, we are witnessing a fundamental recalibration of the Indonesian digital economy. This isn’t just a temporary “startup winter” or a blip on the radar—it’s a coming-of-age story. For years, the narrative was all about GMV (Gross Merchandise Value). How much stuff is moving through your platform? Who cares if you’re losing fifty cents on every dollar spent? The mantra was always: get the users now, figure out the money later. Well, “later” has officially arrived, and it’s knocking on the door with a clipboard and a very stern look on its face.
The Day the “Growth at All Costs” Bubble Finally Burst
Let’s be real for a second. The model of burning cash to acquire users was always a bit of a house of cards. It worked when interest rates were near zero and investors were desperate for any kind of yield, but the world changed. And in Indonesia, where the digital population is massive but the average revenue per user (ARPU) can be quite low, that “burn” model was particularly dangerous. We’re seeing a pivot that I think is actually quite healthy, even if it’s painful in the short term.
Founders are now being forced to ask the hard questions: Does this product actually solve a problem people will pay for? Or were they only using it because we were effectively paying them to use it through subsidies and vouchers? According to the 2023 e-Conomy SEA report by Google, Temasek, and Bain & Company, Indonesia’s digital economy is still on track to reach a staggering $110 billion by 2025. But here’s the kicker—that growth is being driven by a move toward profitability rather than just sheer volume.
“The era of subsidized growth is over. The next decade of Indonesian tech will be defined by those who can build sustainable, cash-flow-positive engines without losing their soul.”
— Anonymous Venture Partner, Jakarta
I’ve talked to a few founders recently who told me, off the record, that the “winter” was the best thing that could have happened to them. It trimmed the fat. It forced them to look at their operations and realize they didn’t need a 50-person marketing team when a lean, data-driven team of five could do the job better. It’s a return to the fundamentals of business, and honestly, it’s about time.
Why Efficiency is the New “Disruption” (and Yes, We’re Talking About AI)
And then, of course, there’s the elephant in the room: Artificial Intelligence. You can’t throw a rock in a Jakarta coffee shop without hitting someone talking about LLMs or generative AI. But in the context of the Indonesian market, AI isn’t just a shiny new toy. It’s being positioned as the ultimate efficiency tool—the “magic wand” that might finally make those unit economics work.
A 2023 McKinsey report noted that generative AI could add up to $4.4 trillion annually to the global economy, and the impact in emerging markets is particularly fascinating. In Indonesia, we’re seeing fintechs use AI to score credit for the unbanked more accurately than ever before. We’re seeing e-commerce platforms use it to slash customer service costs. It’s not about building a “ChatGPT for Indonesia” (though some are trying); it’s about using these tools to fix the structural inefficiencies that have plagued the market for years.
But here’s my take: AI won’t save a bad business model. If your core product doesn’t provide value, adding a chatbot won’t change that. I worry that some startups are using “AI integration” as a way to distract investors from the fact that their user retention is still in the gutter. It’s a tool, not a savior. We need to be careful not to trade one hype cycle (cash burn) for another (AI obsession).
The Human Cost of Getting Lean: Beyond the Spreadsheets
We have to talk about the layoffs. It’s easy to look at spreadsheets and talk about “optimizing headcount,” but these are real people. The tech sector in Indonesia has seen thousands of jobs cut over the last 18 months. These were often the brightest minds in the country, lured away from traditional industries with the promise of high salaries and “changing the world.”
Now, there’s a bit of a talent redistribution happening. People who were laid off from the big unicorns are starting their own smaller, leaner companies. Others are moving back into “traditional” sectors like banking or manufacturing, bringing their tech-first mindset with them. This might actually be the “silver lining” of the downturn. The tech DNA is spreading throughout the entire economy, not just staying concentrated in a few high-rise offices in Kuningan.
I think we’re going to see a much more resilient workforce emerge from this. The “startup bro” culture is fading, replaced by a more pragmatic, perhaps slightly more cynical, but definitely more capable generation of workers. They’ve seen the boom, they’ve lived through the bust, and they know that a high valuation doesn’t mean a stable career.
Forget the Unicorns—I’d Rather See a Centaur
The “Unicorn” isn’t dead, but it’s definitely evolving. We’re moving away from the obsession with billion-dollar valuations. In fact, I’d argue that being a “Centaur” (a company with $100 million in revenue) is now much more prestigious in the eyes of savvy investors than being a “Unicorn” with a billion-dollar valuation but zero profits. The goalposts have shifted, and that’s a win for everyone involved.
Is Indonesia still a good place for tech investment?
Absolutely. The fundamentals—a young, tech-savvy population and a growing middle class—haven’t changed. Investors are just being more selective and looking for actual paths to profitability rather than just user growth.
What sectors are looking the strongest right now?
Fintech remains king, but we’re seeing a lot of interesting movement in “Climate-tech” and “Agritech.” Basically, any sector where technology can solve a real-world, physical bottleneck in the Indonesian archipelago is attracting serious attention.
The “Default Alive” Era: Why the Hustle Finally Needs to Pay the Bills
So, where does this leave us? If the first decade of Indonesian tech was about exploration and the second was about expansion, this third decade is definitely about execution. The companies that survive the next two years will be the ones that are “Default Alive”—meaning they have enough cash to reach profitability without needing another dime of outside investment.
It’s a tougher environment, sure. It’s harder to raise money, and customers are more discerning. But isn’t that how it’s supposed to be? The “easy mode” of the 2010s was an anomaly. We’re back to the “hard mode” of building a real business. And honestly, I think the Indonesian tech scene is finally ready for the challenge. We’re seeing a shift from “copy-pasting” Silicon Valley models to building “Indonesian-first” solutions that actually understand the nuances of the local market.
And that, more than any billion-dollar valuation, is something to be excited about. The hype is dead. Long live the hustle. But this time, let’s make sure the hustle actually pays the bills.
This article is sourced from various news outlets. Analysis and presentation represent our editorial perspective.
