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Indonesia weekly | More fintech funding, Grab fuels up, cleaning up the internet

Written by Nadine Freischlad Published on   5 mins read

It looks like a lot of startup deals are in the making, especially in Indonesia’s fintech space.

VC funding heats up

It looks like a lot of startup deals are in the making, especially in Indonesia’s fintech space.

Investree, a P2P lender announced its series B round led by Japan’s SBI Holdings without disclosing financial details. Cashlez, a startup that creates card-reading devices, and Koinworks, also a P2P lender, are also close to inking deals, according to Dealstreet Asia.

As venture capital firms deploy their funds, they need to refill the stash, too.

VCs currently fundraising are Singapore-based Golden Gate Ventures, which is about to set up a new US$100 million fund for Southeast Asia, TechCrunch reports. Golden Gate backs a couple of regional companies, for example, the C2C marketplace Carousell. In Indonesia, it has stakes in startups like Alodokter, Jojonomic, Gadjian, Printerous, and Indoproc.

Kejora, an Indonesia-based VC, is also about to close its second fund, writes Dealstreet Asia. In all fairness, that second fund has been in the works since last year. Kejora is an early backer of Investree and  Compare88, both firms announced additional capital intakes recently.

The bustle of activity in Indonesia’s fintech space is no surprise and part of a long term upward trend for fintech funding in Southeast Asia. But more specifically, the number of deals made public might increase now as the dust settles after a series of new fintech regulations took effect. Indonesia’s financial services regulator OJK recently clamped down on a number of unlicensed P2P lenders. Companies who have or are well underway in their licensing process might now see themselves in a more stable environment, which is reassuring to investors.

Grab now worth US$11 billion post-money

Grab picked up another US$1 billion from a slew of institutional investors. That’s on top of the US$1 billion the Singapore-based ride-hailing firm from Toyota announced in June. Grab wants to diversify into new verticals, and the funds give it plenty of fuel for its competition with Indonesia’s home-grown super app, Go-Jek.

Go-Jek rolls in Vietnam, but Malaysia says no

Meanwhile, Go-Jek followed through on its promise to launch in Vietnam. After a closed trial, the red-jacketed Go-Viet motorcycle drivers have now hit the streets of Ho Chi Minh City.  Go-Jek’s launch in Thailand should be following soon.

The firm hasn’t said anything about plans for Malaysia, but the government there went ahead and said it would not welcome (link in Indonesian) a ride-hailing concept for two-wheelers for safety reasons. Motorcycle taxis are what Go-Jek started out with, but now it also has cars, taxis, trucks, and a whole bunch of other services. So it could still do something in Malaysia, even if bikes are off limits.

The “Ganjil Genap” problem

A new rule is complicating life for those who’ve become used to taking Go-Car and Grab cars all around the city.

Here’s what happened: To curb traffic, the city government decided only cars with even-numbered license plates are allowed on certain streets on certain days, taking turns with cars that have odd-numbered license plates. This rule has existed for a while, but it now covers a much larger area.

Right now, Grab and Go-Jek’s apps don’t seem to factor in the license plate number when assigning rides to nearby drivers. So there’s a 50-50 chance that your driver will call and say “sorry, I can’t pick you up, I have a ganjil (odd) number,” or genap (even), depending on the day. And then you have to cancel.

Grab says its already working on addressing (link in Indonesian) this very Jakarta problem and will soon factor license plate number into its matchmaking algorithm. Go-Jek made a similar announcement to its drivers a few days ago.

Drafting a law to battle fake news

Indonesia’s IT Ministry says it’s drafting a bill to regulate hate speech and fake news. It hasn’t been as bad here as in India and Myanmar – where fake news on social media is said to have led to horrific, real-world violence.

The ministry is looking at Germany and Malaysia for inspiration, two countries that already have comparable laws. In Germany, the “Netzwerkdurchsetzungsgesetz,” or hate speech act,  requires social media platforms to act swiftly to remove unlawful content or else face stiff fines.

Tighter rules on fake news and lawful content would certainly affect the way news aggregator apps work, as their whole business model consists of compiling as many sources as possible without claiming responsibility for their content. Indonesia has some news aggregator apps like Babe and Baca which would have to think about how to comply with these laws.

Less porn

The IT Ministry is also advancing its battle against online porn. It’s starting a new effort this week in collaboration with 15 internet service providers (ISP) and the association of Internet service providers in Indonesia. The idea is to block pornographic content at ISP level, based on image recognition techniques – not by black-listing porn-related search terms, according to a ministry spokesman.

Sharing pornographic content online is illegal by Indonesian law, and its definition of what constitutes porn is fairly broad. For example, nude pictures of any type are not allowed – one of the reasons why Indonesia has banned video platform Vimeo, which allows nudity in an artistic, non-sexual context.

JD.id unmanned store

Chinese online retailer JD launched a “new retail” concept store in Indonesia, its first outside of China, according to the firm.

That makes for a nice headline but the store itself appears to be more of a showroom than a real store where Indonesians would go to buy things. According to the video that advertises the store, it only accepts credit card payments – a method of payment used by less than 5 per cent of Indonesian shoppers. The idea of an “unmanned,” or fully automated store is also a bit pointless in a country where labour is comparatively cheap and shoppers generally value interacting with humans before making a purchase decision.

Musically and Tik Tok merge

Chinese short video apps Musical.ly and Tik Tok are merging. That will have repercussions for Indonesian users of Musical.ly, as they’ll be asked to transition to Tik Tok. Both apps have fans here, but Tik Tok became the clear winner. Together with Chinese mother company Douyin, Tik Tok now addresses a global audience of 500 million users.


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