Indonesian e-commerce firm Tokopedia recently secured the country’s biggest start-up investment in history. Sareena Dayaram looks at why investors are looking to Southeast Asia’s largest economy.
(SOUNDBITE) (English) REUTERS REPORTER, SAREENA DAYARAM, SAYING: "Move over, Singapore - Indonesia's looking increasingly ready for tech start-up takeoff!" Tokopedia, one of the country's largest online marketplaces, recently landed the biggest start-up investment in the Southeast Asian nation's history. Well-known U.S. venture capital firm, Sequoia Capital and Japan's Softbank sunk 100 million dollars into the five-year-old start-up. Softbank's Vice Chairman Nikesh Arora said in a statement, 'In the Asia region, the growth potential for online marketplaces particularly stands out in Indonesia, and since their founding, Tokopedia has seen remarkable growth with their innovative business model.' So is a Jakarta fertile ground for a start-up harvest? Hugh Mason is CEO of the longest established accelerator in the region. (SOUNDBITE) HUGH MASON, CEO, JFDIASIA.COM IN ENGLISH SAYING "If you look at the opportunities around the region, places like Indonesia are booming. Obviously it's the fourth-largest population in the world and there are new structures setting up there in terms of funding structures, accelerator structures, and so on. I think we're going to see some very interesting things happening in Indonesia over the next year or two." Plus, Internet and smartphone usage is soaring among the country's 250 million people as the middle class and their incomes grow. According to e-Marketer smartphones will reach nearly 40 percent of Indonesia's population by 2017 - that's over 100 million people. So it's not surprising that international tech firms have taken notice - with Facebook, Twitter and Uber all expected to open up offices in Jakarta. (SOUNDBITE) (English) REUTERS REPORTER, SAREENA DAYARAM, SAYING: "But investments in Southeast Asia's largest economy have been few and far between. Analysts says foreign firms are apprehensive since the country's fragmented e-commerce industry is still in early stages." What's more, businesses must cope with shabby physical infrastructure and murky regulations. Nonetheless, the latest investment by leading international tech investors highlight's Indonesia's growing start-up prowess.