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Vantage Point: Wealthtech apps face testing times as large institutional investors flood market


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This weekly newsletter chronicles top digital themes and trends playing out in SE Asia, especially Indonesia. We will decode policy and regulatory changes affecting digital economy sectors, crunch earnings data of top players, track developments related to gig economy workers and attempt to piece together ecosystem buildouts in some of the fastest-growing, venture-backed plays. You can access the previous editions of the Vantage Point weekly posts here.

Executive Summary

Wealthtech apps rethink models amid testing times
GoTo and Toba on the grid with Electrum
Moladin’s Procar buy reflects ecosystem expansion
Rebranding of Go-Ventures underlines it is independent of GoTo

Wealthtech apps rethink models amid testing times

Some of the market darlings of the digital economy in Indonesia during the pandemic came from the wealthtech space, including unicorn Ajaib and the stock trading app Stockbit. However, with more institutional investors entering the market and less retail activity, their business models have been put to test.

There have already been 40 IPOs on the IDX so far this year, raising a total of 40 trillion rupiah as of May 26, considerably higher than the 33 trillion rupiah raised in all of 2022.

The largest IPOs so far this year have been from the energy and commodities sectors, specifically companies related to the EV battery space. These include Pertamina Geothermal Energy, Indonesia’s largest geothermal energy company; as well as PT Trimegah Bangun Persada Tbk (Harita Nickel) and Merdeka Battery Materials, both of which are nickel players focusing on EV battery supplies.

All of these have remained steady performers, but their IPOs were probably dominated by large institutional investors, both local and foreign, given their size.

Although the sheer number of new issues this year, which is not far from the 59 IPOs for the whole of 2022, are helping boost retail participation, market volumes are increasingly being driven by institutional investors as foreign institutional participation is on the rise.

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