Get full access to one story every week, and to summaries of all other stories. Just create a free account

Thesis: For over a decade, venture capital has been flowing into Indonesia, backing growing cohorts of startups. This era gave rise to consumer-technology giants like GoTo, which is now listed on the Indonesia Stock Exchange (IDX). Venture capital allows founders to quickly scale their companies from scratch while factoring in the risk that the majority of investments will fail along the way. This makes it an effective mechanism to identify and nurture winners in the fast-paced digital economy.

That model may have made sense in the early days of consumer-internet companies, argues Martyn Terpilowski.

The former hedge-fund manager in Tokyo and Hong Kong is now an entrepreneur in Indonesia. His company, Bhumi Varta Technologies, is a location-intelligence platform. It serves enterprise clients and doesn’t follow the blitzscaling playbook that’s typically utilised by consumer-facing businesses.

Still, from this vantage point, Terpilowski has become a vocal critic of the venture-capital industry in Indonesia. He believes that the venture-capital equation doesn’t add up in an environment where entry barriers have been brought down so low that anyone can launch an app. The inflow of venture capital has created an overheated market in Indonesia, and it is about to face a reckoning. In his view, it doesn’t have to be this way—if the venture-capital industry can reform itself.

“The conditions for venture capital have changed.”

When venture capital started, it was intended for technology and innovation. There weren’t that many ideas, and there was not that much money.

In the early days for consumer-internet companies, venture-capital firms like Sequoia made a lot of money on the likes of YouTube, for example. That’s great. They were first in the market. Blitzscaling worked because there were few other players.

Then it became trendy. The more money is thrown at anything, the more investments you have competing with each other.

Now, we have 15-minute grocery deliveries. That’s not technical innovation. That has nothing to do with innovation.

The whole concept has changed. You now have more than 200 venture-capital companies in Indonesia and Singapore, chasing the same limited opportunities. They all want to be in the business-to-consumer (B2C) space because they want to achieve unicorn valuations. In business-to-business (B2B), if you’re dealing with large corporate clients, you can’t mark up valuations the same way.

Generally, B2B is the way you actually make money in the longer term. It’s less price-sensitive, and it’s more about loyalty. Enterprise clients are not going to rip up the contract every year in a B2B model because the infrastructure takes too long to build.

But venture capitalists (VCs) want to back consumer-facing companies, and now you have a situation where there are coffee shops and 10 different food-delivery services backed by VCs.

Here, we’re not seeing tech at all, really.

AUTHOR

Nadine Freischlad

Nadine is based in Indonesia. She covers Southeast Asia's super apps, the changing nature of work and employment, and other structural shifts happening as a result of digital disruption.

View Full Profile

Read this story. Subscribe Now

This story is available across both editions. Subscribe to the one that’s most relevant for you. Questions?

 

Premium

  • 5 original and reported longform business stories every week
  • Access to ONLY India edition
  • Close to 250 exclusive stories every year
  • Full access to over 6 years of paywalled stories
  • Pick up to 5 premium subscriber newsletters
  • 4 original and reported longform business stories each week
  • Access to ONLY Southeast Asia edition
  • Close to 200 exclusive stories every year
  • Full access to all paywalled stories since March 2020
  • Pick up to 5 premium subscriber newsletters

Rs. 2,750 /year

$ 120 /year

India Edition
Subscribe Subscribe
Most Asked For

Borderless

  • 8 original and reported longform business stories each week
  • Access to both India and Southeast Asia editions
  • Close to 400 exclusive stories every year
  • Full access to over 6 years of paywalled stories across India and Southeast Asia
  • Unlimited access to all premium subscriber newsletters
  • Visual Stories

Rs. 4,200 /year

Subscribe
 

Echelon

  • 8 original and reported longform business stories each week
  • Access to both India and Southeast Asia editions
  • Close to 400 exclusive stories every year
  • Full access to over 6 years of paywalled stories across India and Southeast Asia
  • Unlimited access to all premium subscriber newsletters
  • Visual Stories
  • Bonus annual gift subscription
  • Priority access to all new products and features

Rs. 8,474 /year

Subscribe
Or

Questions?

What kind of subscription plans do you offer?

We have three types of subscriptions
- Premium which gives you access to either the India or the Southeast Asia edition.
- Borderless which gives you complete access to The Ken across both editions
- Echelon which gives you complete access to The Ken across both editions along with a bonus gift subscription

What do I get if I subscribe?

The Premium edition gives you access to stories in that edition along with any five subscriber-only newsletters of your choice.

The Borderless and Echelon subscription gives you complete access to The Ken across editions and unlimited access to as many newsletters as you like.

What topics do you usually write about?

We publish sharp, original and reported stories on technology, business and healthcare. Our stories are forward-looking, analytical and directional — supported by data, visualisations and infographics. We use language and narrative that is accessible to even lay readers. And we optimise for quality over quantity, every single time.

Our specialised subscriber-only newsletters are written by our expert, award-winning journalists and cover a range of topics across finance, retail, clean energy, cryptocurrency, ed-tech and many more.

How many newsletters do you have?

We are constantly adding specialised subscriber-only newsletters all the time. All of these are written by our team of award-winning journalists on a specialised topic.

You can see the list of newsletters that we publish over here.

Does a Premium subscription to your Indian edition get me access to the Southeast Asia edition? Or vice-versa?

Afraid not. Each edition is separate with its own subscription plan. The India edition publishes stories focused on India. The Southeast Asia edition is focused on Southeast Asia. We may occasionally cross-publish stories from one edition to the other.

We recommend the Borderless or the Echelon Plan which will give you access to stories across both editions.

Do you have a mobile app?

Yes! We have a top-rated mobile app on both iOS and Android which allows you to read on-the-go and has some amazing features like the ability to bookmark stories, save on your device, dark mode, and much more. It’s really the best way to read The Ken.

Is there a free trial?

You can sign up for a free account to experience The Ken and understand our products better. We’ll send you some free stories and newsletters occasionally, and you can access our archive of previously published free stories. You can stay on the free account as long as you’d like.

The vast majority of our stories, articles and newsletters can be accessed only by a paid subscription.

Do you offer any discounts?

Sorry, no. Our journalism is funded completely by our subscribers. We believe that quality journalism comes at a price, and readers trust and pay us so that we can remain independent.

Do you offer refunds?

No. We allow you to sample our journalism for free before signing up, and after you do, we stand by its quality. But we do not offer refunds.

I am facing some trouble purchasing a subscription. What can I do?

Just write to us at [email protected] with details. We’ll help you out.

I have a few more questions. How can I reach out to you?

Sure. Just email us at [email protected] or follow us on Twitter.