Observing Investment Opportunities For Startup 2023, Is It Still Promising?

YOGYAKARTA The opportunity for startup investment in 2023 is interesting to observe, considering that many startups are starting to falter due to uncertain world and geopolitical economic situations. This can be seen from the large number of startups or startups that have laid off massive employee employment (PHK).

The latest news is that there is GoTo which cut 1,300 employees. Apart from GoTo, other startups that make downsizing are Ruangguru, Grab, and Sirclo.

So, is investment in startups still promising in 2023? The answer to this question can be seen in the following review.

East Ventures' Managing Partnet, Roderick Purwana, believes startup investment is still quite promising, although many startup companies have been affected by the Russian-Ukraine war.

Roderick predicts that Indonesia's digital economy will be bright in the future.

"We from the East Ventures side see that there are still many interesting investments that can be worked on from investing to startups. Indeed, there are internal challenges, especially geopolitical situation such as Russia-Ukraine. But we will see this (next year), the digital economy is still very positive," said Roderick in a video entitled Live Series CEO #1: Opportunities for Acceleration of the Digital Economy and National Economic Recovery which airs on the Kompas Daily YouTube Channel, quoted by VOI, Wednesday, November 23, 2022.

In line with Roderick, Country Managing Director of Grab Indonesia, Neneng Goenadi said, the value of Indonesia's digital economy still has great opportunities, and it is predicted that it will defeat China. This is because the development of digitalization in Indonesia is growing very rapidly.

"I see that if all the small cities have advanced, people don't need to urbanize to the city because their city is very okay (digitalized). As a result, we become a very developed country and we can be better than China," said Neneng.

Don't Disrupt Large Startup Valuation

Separately, investment analyst and Managing Partner Frans & Setiawan Law Office, Hendra Setiawan Boen asked investors not to be trapped by the large valuation of startups.

Hendra said that the phenomenon of the fall of several major startups shows that there are startups that are valuated in billions of dollars but only on paper.

"It does not reflect the true value of startup companies," said Hendra, quoting Antara.

As is known, in 2022, the world will be shocked by the fall of several billion-dollar startups categorized as unicorns or decacorns such as Theranos, FTX, and Terra Luna.

Hendra said from the start he did not agree with the designation unicorn, decacorn or hectocorn. According to him, this status can lead to assumptions in the minds of potential investors, as if the startup that already holds the title is definitely a large, healthy company from a financial perspective.

"In fact, the valuation of billions of dollars is calculated from the investment commitments of investors who are not infrequently in the form of debt and must be paid back along with interest," said Hendra.

He added that in Indonesia there are dozens of startups categorized as unicorns and even decacorns, but until now there are still chronic losses.

"Indeed, some of these losses are due to the inefficiencies of startups in managing finances and investment funds, for example giving large salaries and luxury facilities to workers for branding or jor-joran in burning money," he explained.

Hendra revealed that unicorn or decacorn-categorized startups such as Theranos, FTX, and Terra Luna, were later known to have failed, but the three startups did not experience business failures or business performance.

"But because of fraud and embezzlement with the perpetrators, it is none other than the founders, as well as poor startup management," he added.

Theranos founder Elizabeth Holmes was recently sentenced to more than 11 years in prison for being proven to have deceived investors through fake medical test kit startups. Do Kwon, founder of Terra Luna, is currently a fugitive for Interpol and the United States prosecutor's office is also investigating Sam Bank-Fried as the founder of FTX, he said.

That's the information regarding startup investment opportunities in 2023. Hopefully it will be useful!