July 22, 2021 • Knowledge
July 5, 2021 • Knowledge, Business
Do you know the 6 Unicorn Companies in Indonesia?
Table of Contents
Over the past decade, the development of the business world has progressed rapidly. There are so many startup companies that have sprung up and developed significantly, including in Indonesia.
Some of them are known to have attained unicorn status. Indonesia is known as the country with the most significant number of unicorn companies in Southeast Asia.
The term unicorn is already familiar to some people. However, there are still many who do not know entirely what a unicorn is.
What is a unicorn? How can a startup company be called a unicorn? What are the unicorn startups in Indonesia? This article will answer your questions regarding the things above.
Make sure you read to the end!
What is a Unicorn Company?
The origin of the term unicorn comes from Greek mythology. A unicorn is a mythical animal in the form of a white horse.
Unicorns come from the mainland of India and have a unique horn on their foreheads. It is said that the unicorn horn is not ordinary.
Its horn can neutralize all forms of poison. Therefore, many glorify this animal even though it’s rare and is only considered a myth.
The name of this mythical animal is finally used as a context in the world of startup companies. The term unicorn in startups was first proposed by a venture capitalist from the United States named Aileen Lee in 2013.
Lee, the founder of Cowboy Ventures, calls startup companies with a valuation of USD 1 billion a unicorn. Therefore, a startup company can be called a unicorn if it has a valuation of USD 1 billion, or equivalent to IDR 14 trillion.
Why unicorns? Because, just like the unicorn itself, which is very rare and impossible to find, to have a valuation of USD 1 billion for a startup company is an extraordinary achievement and very, very difficult to achieve.
They can obtain this figure from both public and private investors. But this is, of course, not an easy job because there are many things that startup companies must pay attention to.
Among them are the number and nominal transactions, customers or application users, and product technology. Startup companies must also pay attention to the quality of the team and innovate continuously to compete with competitors.
According to research conducted by CBInsights, at least 726 startup companies have unicorn status as of June 2021 and will continue to grow every month. When they first used the term unicorn, only 39 startup companies won the unicorn title.
In today’s digital era, several startup companies have proven to match and even surpass the success of big companies in the world. So we can conclude that the term unicorn is used to measure the success of a startup company.
6 Levels of Startup Business
Not all newly initiated business fields can be categorized as startup companies. Only companies engaged in information technology (IT) and internet-based can be called startup companies.
The rise of startup companies is triggered by the rapid advances in technology today, thus allows anyone to realize their ideas through innovation and establish a technology and internet-based company.
Various unique and exciting innovations have been successfully realized into application products by startup companies, which are proven to solve problems experienced by the community. You can even use applications developed by startup companies easily with just a smartphone.
Talking about startup companies is indeed not complete without mentioning the term valuation. The term valuation refers to the amount of business potential or economic value of a company, usually used on the stock exchange.
In addition, the valuation figure can also be used as a benchmark in calculating how much success a company is. Since startup companies have sprung up in Indonesia, both local and foreign startups, the term valuation has become an exciting topic.
The discussion about this valuation relates to funding from investors for startup companies which are usually in incredible amounts. Investors no longer hesitate and are increasingly competing to disburse funds to invest in startups considered to have significant business potential.
As it turns out, unicorns aren’t the only valuation tier for startups. The unicorn level can still develop again at the next level, namely decacorn, or even go to the highest level, namely hectocorn.
The level of valuation in startup companies from lowest to highest are:
- Cockroach. The total valuation is less than USD 10 million.
- Pony. The total valuation is between USD 10 million to USD 100 million.
- Centaurs. The total valuation is between USD 100 million to USD 1 billion.
- Unicorn. The total valuation is between USD 1 billion to USD 10 billion.
- Decacorn. The total valuation is between USD 10 billion to USD 100 billion.
- Hectocorn. The total valuation is more than USD 100 billion.
The following is the explanation of each level of valuation in startup companies as a whole:
The first and lowest level in the valuation type for startup companies is the cockroach. The term cockroach refers to small and newly started companies that do not yet have high valuations.
The total valuation of this type of startup is less than USD 10 million or equivalent to IDR 14.7 billion. Even so, we cannot underestimate these cockroach companies.
Even though the valuation amount is still relatively small, they are usually more active in innovating and developing ripe strategies to attract investors to provide business capital. All startup companies have gone through this phase.
The characteristics of cockroach companies are usually included in the initial ecosystem of startups. With persistence and hard work to attract investors, who know they can grow and increase their valuation.
So it is not wrong if the companies that are just starting are called cockroaches because they are as persistent as cockroaches with a high survival ability.
The second level of valuation for startup companies is the pony, a symbol in a tiny pony. At this level, the business competition is very tight, so it requires persistence to survive.
Startups with pony titles have a total valuation of between USD 10 million and USD 100 million. Pony levels are often referred to as the most ferocious levels among other classes.
Therefore, startup companies that are already at this point usually have succeeded in developing from all limitations, such as limited resources. They will continue to convince investors to invest so that the valuation keeps getting bigger.
Suppose a startup company can survive at the pony level. In that case, the startup will likely grow and rise to the next level, like a pony growing and developing over time.
The next level in the valuation of startup companies is Centaurs. Centaurs, which is the third valuation level, is symbolized by a Greek mythological creature in the form of a half-horse man.
But in astronomy, it is described as a constellation called Centaurus. It also appears in astrology as the symbol of the zodiac Sagittarius.
The centaurs rank is given to startup companies with a total valuation ranging from USD 100 million to USD 1 billion. According to data from DailySocial, there are around 70 centaurs startups from Southeast Asia.
Still, from the same data, at least 27 startups in Indonesia have a valuation of more than USD 100 million and hold the status of centaurs. Among them are Akulaku, Kredivo, and Blibli.
At this level, if a startup company is able to maintain its valuation amount, it will likely be easier to attract investors as they have a greater chance of being able to move up to the next level, namely unicorns.
We have now come to the unicorn, which is the fourth level of a startup company valuation. As explained above, a startup company can achieve unicorn status if it has a total valuation of between USD 1 billion and USD 10 billion.
Startup companies that can reach to this level are still relatively rare and an achievement that is very difficult to obtain, just like the mythological unicorn, which is rare and impossible to find.
In Indonesia, there are already several startup companies that can reach the unicorn level. Some of them are Tokopedia, Bukalapak, Traveloka, OVO, and JD.id.
After the unicorn, there is another higher level of valuation, namely the decacorn. The term decacorn is a combination of two words, namely deca and unicorn.
Deca or deka comes from the Greek word, which refers to the number ten and is given the suffix of the term unicorn. The Decacorn itself has a symbol in the form of a winged horse called Pegasus.
As the name implies, this term is applied to startup companies if they have a total valuation of between USD 10 billion and USD 100 billion. This value is ten times the value of the unicorn.
Usually, companies that can reach this level are market leaders in the field of business. In addition, to get the decacorn level, a startup requires investors who have significant assets to invest.
Well-known startups that have held the title of decacorn, some examples are Airbnb, Pinterest, Snapchat, Uber, Xiaomi, SpaceX, and several others. While startup companies from Asia have achieved the decacorn title, one of them is Grab.
The good news is that one of the startups made by the nation’s children, Gojek, has achieved decacorn status since 2019. In the future, Tokopedia is also expected to follow Gojek’s success and become the second startup from Indonesia to achieve the decacorn level.
The highest level given to startup company valuations, for now, is hectocorn. The term hectocorn itself is a form of the depiction of a dragon animal.
Hectocorn status coronation is given if a startup company has a valuation amount greater than USD 100 billion, or ten times the value of a decacorn. Startup companies that get the hectocorn title are still scarce, given how difficult it is to reach this level.
Because of the scarcity, there is not much information that we can deduce about this valuation level. Some well-known companies that have entered this elite category are Facebook, Apple, Microsoft, and Google.
From Asia, two startups have stepped into the hectocorn ranks, namely ANT Financial or previously known as Alipay, and ByteDance. Unfortunately, no local startup has reached the hectocorn level yet.
Considering the decacorn label only applies to startup companies that are still in the development stage. Many large companies in the world already have a total valuation of more than USD 100 billion. Still, the title of decacorn can no longer be awarded to them.
What are the 6 Unicorn Companies from Indonesia?
Indonesia is known as one of the unicorn-producing countries in the world. Indonesia still holds the record as the country with the most significant number of unicorn companies in Southeast Asia.
Unmitigated, there are a total of 6 unicorn startups from Indonesia as of June 2021. They are:
- Gojek. Online-based transportation and logistics service.
- Tokopedia. An online marketplace with a Customer to Customer (C2C) business model.
- Bukalapak. Another Customer to Customer (C2C) online marketplace.
- Traveloka. Transportation, hotel, and leisure ticket booking platform.
- OVO. Technology-based digital and financial payment application (fintech).
- id. An online marketplace with a Business to Customer (B2C) business model.
That doesn’t include unicorn startups from other countries that also operate in Indonesia, such as Grab, SEA Group (Garena and Shopee), and Lazada. Here is the full explanation of the six unicorn startups in Indonesia:
The first startup company from Indonesia to hold the status of a unicorn is Gojek. Gojek is a startup company engaged in transportation and logistics services based on mobile applications.
Gojek was founded in 2010 by Nadiem Makarim along with his two partners. At first, Gojek only served taxi and motorcycle taxi orders through a call center with only 20 drivers.
Then in 2015, Gojek began to develop a mobile application to facilitate ordering. In the same year, Gojek made a breakthrough by offering three new types of services besides GoRide, namely GoFood, GoSend, and GoMart.
In 2017, Gojek officially bore the title of the first unicorn startup company from Indonesia. Two years later, Gojek’s status increased to a decacorn with a total valuation of USD 10 billion.
We cannot separate Gojek’s success in the country from the help of investors who provide such large amounts of funding. In addition, thanks to the innovation of cheap and fast transportation services, Gojek can reach an astonishing number of users.
Gojek’s very rapid progress has had a positive impact on the economy in Indonesia. Gojek also plays an active role in supporting the growth of MSMEs in Indonesia.
Gojek has around 20 transportation and logistics services and operates in more than 200 cities in Indonesia. Gojek is also spreading its wings by expanding to several neighboring countries, such as Thailand, Singapore, and Vietnam.
Tokopedia is the second startup company from Indonesia to win the unicorn title. Tokopedia is engaged in e-commerce, which allows every individual, small store, and big brand to open and manage an online store.
Tokopedia was founded on February 6, 2009 with William Tanuwijaya as CEO and Leontinus Alpha Edison as COO and CTO. On August 17, 2009, coinciding with Indonesia’s independence day, they launched the official Tokopedia.com website.
Eight years after it was founded, an injection of funds from Alibaba Group in 2017 made Tokopedia successfully held the unicorn status. Now, Tokopedia has an estimated total valuation of USD 7 billion.
Tokopedia is committed to focusing on developing a ‘super ecosystem.’ That is, everyone can contribute and add value to each other and grow and develop together.
Tokopedia can accomplish this super ecosystem by embracing multiple partners, such as logistics and digital payments. Tokopedia also strives to build a more robust and broader network to reach all corners of the country.
Now, Tokopedia claims to have dominated up to 1.5 percent of the economy in Indonesia based on the number of monthly active users, which reaches 90 million users. The number of sellers reported is 7.2 sellers.
Besides Tokopedia, another e-commerce startup that also acquired the unicorn title was Bukalapak. Bukalapak provides online-based buying and selling facilities with a Customer to Customer (C2C) business model.
Bukalapak was founded by Achmad Zaky with his two friends, Nugroho Herucahyono and Fajrin Rasyid in 2010. At that time, they saw a potential opportunity to develop an online store website, which we now know as e-commerce.
Their foresight in seeing opportunities finally paid off in 2018, where Bukalapak officially held the title as a unicorn startup. The total valuation of Bukalapak is estimated to have reached more than USD 3.5 billion.
Since its presence in the country, Bukalapak has endeavored to be a leading and innovative startup company by opening a research and development center. Some of the innovation and technological breakthroughs developed are drones and Artificial Intelligence (AI).
Bukalapak has always been committed to developing small businesses by providing opportunities and choices for everyone to get a better life.
Bukalapak has more than 70 million active users, 42 million monthly users and serves more than 6 million sellers. In the future, Bukalapak plans to become a more caring and environment-friendly company.
Unlike Tokopedia and Bukalapak, which are in the e-commerce business, this unicorn-status startup focuses on the accommodation sector. Traveloka is an online ticket booking platform for transportation, lodging, and recreation.
Traveloka was founded by Ferry Unardi, Derianto Kusuma, and Albert Zhang in 2012. Initially, they only provided one service, namely booking airline tickets through the website.
Over time the services provided by Traveloka have increased, such as booking hotel tickets, trains, tourist attractions, and car rentals which strengthens Traveloka’s position as a market leader in the travel industry in Indonesia.
Traveloka received the Unicorn title in 2017, thanks to a USD 350 million injection of investment funds from the US company Expedia. The total valuation from Traveloka is estimated at USD 3 billion.
Now, Traveloka is not only known as an online hotel ticket booking and transportation platform. It has drilled other fields, such as lifestyle and finance. Traveloka has been operating in other countries, such as Malaysia, Singapore, Australia, the Philippines, Thailand, and Vietnam.
Visionet International, better known as OVO, is the fifth startup company from Indonesia to achieve unicorn status. OVO is a startup engaged in payments and digital wallets.
This startup company was established under the auspices of the Lippo Group in 2017. Although still relatively young, OVO became a unicorn company just two years after it was founded.
Yes, OVO achieved unicorn status in 2019. Their total valuation is also quite phenomenal, reaching USD 2.9 billion or equivalent to IDR 42.2 trillion.
We cannot separate OVO’s valuation from the injection of funds disbursed by investors, namely Grab, Tokopedia, and Tokyo Century Corporation. OVO is a very successful and rapidly growing digital payment platform. It has even become the most prominent fintech application in Indonesia.
OVO is one of the startups that has benefited from the increase in digital payments due to the Covid-19 pandemic. The number of payment transactions through OVO has been reported to have exceeded 1 billion transactions.
The OVO mobile application has now been downloaded to more than 115 million devices, works with 700 merchants, and can be used in 373 cities in Indonesia. OVO is also a trusted payment partner on the Singapore-based transportation startup Decacorn, Grab.
Notably, OVO has managed to reach more than 300 million users in Indonesia. With OVO, users can transfer money, make payments, top-up credit, and even manage assets and investments.
Another homeland e-commerce that has successfully received the unicorn title is JD.id. Unlike Bukalapak and Tokopedia, which apply the C2C business model, JD.id is a marketplace with a Business to Customer (B2C) business model.
JD.id started operating in Indonesia in 2015. In 2019, the management of JD.id confirmed that the total valuation of their company had reached USD 1 billion.
As reported from several sources, JD.id’s unicorn status was obtained after cooperating with several other companies, including Gojek. In addition to providing an online buying and selling platform, JD.id also provides delivery services that reach up to 365 cities throughout Indonesia.
Honorable Mention: J&T
In addition to the names above, another local startup company has won the unicorn title, namely J&T. This company, which is engaged in shipping and logistics, has earned the unicorn status in April 2021.
Based on data published by CBInsights, J&T has a valuation of USD 7.9 billion. This figure is only below Gojek’s valuation and surpasses the achievements of Tokopedia, Bukalapak, Traveloka, OVO, and JD.id.
J&T, whose full name is PT. Global Jet Express was founded in 2015 by the two founders of OPPO, Jet Lee and Tony Chen. This fast-growing logistics company has its head office in Jakarta.
In 2017, J&T expanded to other ASEAN countries, such as Malaysia, Singapore, Philippines, Thailand, Cambodia, and Vietnam. J&T is a trusted delivery partner in various marketplaces in Indonesia, including Shopee, Bukalapak, Tokopedia, Blibli, and JD.id.
Unicorn companies are the name given to startup companies with a valuation of more than USD 1 billion. A startup company can obtain the unicorn title if only the valuation ranges from USD 1 billion to USD 10 billion.
To become a startup company with a unicorn title is not accomplished in a short time. It takes innovation, hard work, consistency, and thoughtful business strategies to crawl up from the lowest valuation level to get unicorn status.
In addition, what is no less important is the role of investors who are willing to invest astonishing amounts of money in reaching the unicorn valuation level. Therefore, startup company owners should be able convince investors that investing in their startup is the right choice.
Hope this article would improve your knowledge about the startup world. See you!
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