Why are Google and Amazon investing in Indonesia’s tech unicorns? Because Alibaba and Tencent are too

Name: Global expansion of TikTok and other Chinese tech companies is likely, only not in the West
Uploaded: 2020-11-30T00:30:06.000Z
Duration: 6 min 2 s
Description: Global expansion of TikTok and other Chinese tech companies is likely, only not in the West

The US tech giants have made inroads into the Southeast Asian nation this year, joining companies from China in vying for the lucrative regional market

The American firms are seen as cautious, mostly targeting heavily funded tech companies, while Chinese investors are viewed as more willing to take risks

Reading Time:6 minutes

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Jakarta-based e-commerce company Bukalapak has attracted a wide range of foreign investment, including most recently from Microsoft. Photo: Handout

Resty Woro Yuniar

Published: 8:30am, 30 Nov 2020Updated: 8:46am, 30 Nov 2020

Southeast Asia is increasingly becoming a battleground for tech giants from the United States and China vying for investment opportunities in the region, amid slow growth in the West and heightened political tensions between Washington and Beijing.

At the centre of their battle is Indonesia, the region’s largest digital market. This year, four American tech juggernauts – Google, Microsoft, Facebook and PayPal – have invested in the country’s unicorns, or private tech firms valued at over US$1 billion, and the trend is not expected to abate any time soon, analysts say.

“Indonesia, specifically, is the fourth-largest internet population in the world, has a high number of exciting tech start-ups and is the largest market by population,” said Pinn Lawjindakul, vice-president at Lightspeed Venture Partners in Singapore.

“These investments in Indonesia signal the importance of the country and the wider region in the eyes of these global tech giants. This vote of confidence will have a positive ripple effect. More international companies will be driven to follow suit and invest here, which will encourage more innovation and the creation of more start-ups,” she said.

“It is a very exciting time for founders and investors in Indonesia and the Southeast Asia region as a whole.”

While Indonesia is the obvious place for investors to make regional inroads, “countries such as Singapore, Thailand, Vietnam and the Philippines are also natural candidates for high investment interest in the next few years” owing to their high GDPs and first-time internet user growth, Lawjindakul said, highlighting the bullish nature of tech investors in the region despite pandemic-related headwinds.

06:02

Global expansion of TikTok and other Chinese tech companies is likely, only not in the West

Earlier this month, Indonesian e-commerce company Tokopedia announced that it had raised an undisclosed amount of investment – reportedly around US$350 million – from Google and Temasek, Singapore’s sovereign wealth fund. Tokopedia, valued at US$7 billion, is already backed by Chinese tech giant Alibaba, alongside Japanese conglomerate SoftBank Group and venture capital firm Sequoia Capital India. Alibaba owns the Post.

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