MEDICI’s new ‘Indonesia FinTech Report 2021’ analyzes the country’s FinTech sector and trends in the last three years—a deep-dive by segments & subsegments, funding patterns, M&As, ecosystem partnerships, industry drivers, and perspectives drawn out of regulatory, geopolitical, economic, and market dynamics.

1. 1
INDONESIA FINTECH REPORT 2021 – EXECUTIVE SUMMARY
Cover

2. 2
INDONESIA FINTECH REPORT 2021 – EXECUTIVE SUMMARY
Overview [1/2]
Indonesia is a FinTech powerhouse in
Southeast Asia. It is now poised to become a
major player in the global FinTech landscape.
The GDP of the country has increased at a
steady rate of 5% over the past few years.
With a young population (the median age is
30.2 years), it is poised to use its demographic
dividend to play an important role in financial
services. The country is already home to five
Unicorns: Gojek, Tokopedia, Bukalapak,
Traveloka, and OVO. A lot of FinTech activity
happens around these five companies. Ride-
hailing platform Gojek offers its digital wallet
GoPay. Consumers can use this wallet to pay
for rides, food delivery, and a multitude of other
services available on the platform. Similarly,
Tokopedia and OVO announced a partnership
in October 2018, which saw OVO's e-wallet
service replacing TokoCash on Tokopedia's
platform.
FinTech funding has consistently increased
over the last three years (2018–2020). From
2018 to 2019, there was a 36% increase in
FinTech funding (Super app Gojek raised
$4.25 billion in various rounds during the
three-year (2018-2020) period. However, we
have not considered these rounds under
FinTech funding as the amount was utilized for
the overall development of the Gojek
ecosystem, which includes their digital wallet
GoPay). Even though 2020 was deeply
impacted by the COVID-19 pandemic, the year
registered a YoY increase in funding,
recording $329 million, the highest so far.
The funding momentum seems to have spilled
over to 2021, with disclosed deals worth $65
million already being recorded in January.
One of the key drivers for the explosive of
digital offerings in Indonesia is the growing
density and penetration of smartphones and
mobile internet. The number of smartphone
users in Indonesia was estimated to be 81.87
million in 2020. Currently, Indonesia is the
fourth-largest smartphone market in the world
after China, India, and the US. Thriving sales
are also increasing internet consumption in the
country.
Capital
Jakarta
Population
270.20 Mn
Median Age
30.2 years
GDP Growth (Annual, 2019)
5.03%
203.0
317.0 329.0
0
100
200
300
400
2018 2019 2020
Values in $, Mn
What is driving FinTech in the most promising market in SEA

3. 3
INDONESIA FINTECH REPORT 2021 – EXECUTIVE SUMMARY
Overview [2/2]
As per the e-Conomy SEA 2019 report, there are 152
million internet users in Indonesia. They are connected to
mobile internet for approximately four hours a day, making
Indonesia one of the world's top ten countries by mobile
internet usage. The global average is 3 hours and 13
minutes. These numbers in internet consumption have
created some of the largest internet economies in the
region.
Estimated at $40 billion in 2019, Indonesia’s internet economy has more than quadrupled in size
since 2015 at an average growth rate of 49% a year. As the largest and fastest-growing internet
economy in the region, Indonesia is well on track to cross the $130 billion mark by 2025. Users are
easily accessing E-Commerce, Ride-Hailing, and Food Delivery apps more and more often. For
example, the number of sessions for E-Commerce apps in Indonesia has jumped from 8 billion in
the first half of 2016 to almost 30 billion in the same period three years later.
Sectors that are gaining
traction:
1. Digital Wallet is the most funded subsegment across the FinTech sectors and includes GoPay
(Gojek), OVO, which has attained Unicorn status, LinkAja, and DANA.
2. P2P Lending is gaining in popularity. In 2020, total funding from P2P platforms reached IDR
113.46 trillion ($7.7 billion) with close to 26 million borrowers, from over 160 FinTech
companies listed with the regulator, according to data from Bank Indonesia.
3. B2B FinTech has been attracting investor interest with firms involved in digitizing warungs such
as Bukuwarung, BukuKas, and CrediBook raising funds last year.
The FinTech sector in Indonesia has been attracting investors from across the globe, and the money
being generated will go a long way in building world-class FinTech products and services from the
country.
As stated earlier, E-Commerce, Ride-
Hailing, and Travel are the three most
frequented internet businesses in
Indonesia.
Source: e-Conomy SEA 2019
Internet Users in Indonesia
92
Mn
152
Mn
2015 2019
Indonesia Internet Economy
(GMV, $, Bn)
Number of
FinTech startups
by segment
76
Payments
73
Lending
32
WealthTech
20
B2B FinTech
12
InsurTech
96
Others
Note: ‘Other Segments’ include Crowdfunding, Remittance, Artificial Intelligence, RegTech,
BankingTech, Blockchain and Cryptocurrency
21
10
3.5 6
32
3 4.4 5
83
15
10
16
E-commerce Online
Travel
Online
Media
Transport
& Food
2019 2020 2025 CAGR
21%
54% 36%
-68%
18%
24%
28%
-18%
What is driving FinTech in the most promising market in SEA

4. 4
INDONESIA FINTECH REPORT 2021 – EXECUTIVE SUMMARY
Regulatory Canvas
Businesses in the FinTech sector in Indonesia fall under one of the three market regulators:
Bank Indonesia (BI), OJK, and Bappebti (a supervisory authority for commodities futures
trading). Payments activities are regulated by BI, while regulations related to crypto, virtual
currency, and digital assets fall within the ambit of Bappebti. All other segments, including
lending and insurance, are scrutinized by OJK. Financial transactions and payments using
virtual currencies or crypto are prohibited in Indonesia. Trading is permitted only under
approval from Bappebti, upon satisfying multiple conditions. OJK and BI run sandboxes for
promising FinTechs to launch their pilots under relaxed regulatory conditions for a limited
duration before granting full operational license.
Here are some of the main FinTech areas that are regulated:
P2P Lending (OJK)
Scrutinizes
• Licensing
• Foreign shareholding
• Balance sheet lending
Crowdfunding (OJK)
Scrutinizes
• Capital requirements
• Platform licensing
• Restrictions on
business activities
E-money (BI)
Scrutinizes
• Capital requirements
• Foreign shareholding
• Licensing (Front-end, Back-end
operator licenses)
Payments Processing (BI)
Scrutinizes
• Licensing
• Foreign shareholding
Crypto Trading
(Bappebti)
Scrutinizes
• Capital requirements
• Conditions for trading
OJK Sandbox
• Policy and governance support
• Support and relaxation with
compliance
• Consumer protection
• Eventual license
BI Sandbox (Payments)
• Policy support
• Testing
• Management of risk and liability
• Eventual license
Regulatory Sandboxes

5. 5
INDONESIA FINTECH REPORT 2021 – EXECUTIVE SUMMARY
Indonesia FinTech Funding - 2020
TOTAL VC/PE FUNDING = $329.11 Mn*
NO. OF VC/PE DEALS = 22
Total VC/PE Funding (Mn) Total No. of Deals
Note: The total amount doesn’t include undisclosed deals, i.e., 10 deals. Doesn’t include debt funding, convertible bonds,
grants, ICOs, and IPOs.
*Excludes $1.73 Bn raised by Gojek for the overall development of the Gojek ecosystem, which includes their digital wallet GoPay.
TOP 10 FUNDED DEALS
(Series B, Nov. 2020 – $100 Mn)
(Series B, Sep. 2020 – $54 Mn)
(Series B, Jul. 2020 – $53 Mn)
(Series C, Apr. 2020 – $40 Mn)
(Series C, Apr. 2020 – $24 Mn)
(Series: Venture, Apr. 2020 – $20 Mn)
(Series A, Apr. 2020 – $13.5 Mn)
(Series A, May. 2020 – $10 Mn)
(Series: Seed, Aug. 2020 – $9 Mn)
(Series B, Aug. 2020 – $5 Mn)
MOST ACTIVE INVESTORS
158.0
94.5
67.5
9.1
5
7
2
6
1 1
0
2
4
6
8
0
40
80
120
160
200
Payments Lending InsurTech B2B
FinTech
Crypto-
Currency
WealthTech
Undisclosed Undisclosed

6. 6
INDONESIA FINTECH REPORT 2021 – EXECUTIVE SUMMARY
Payments Market Landscape
Payment Gateways This is not an exhaustive list
Mobile/Digital Wallets
Bill Payments
Software/Whitelabel/APIs
B2B FinTech Market Landscape
This is not an exhaustive list
Accounting/Tax
E-invoicing/Expense Management
PoS/Mobile PoS

7. 7
INDONESIA FINTECH REPORT 2021 – EXECUTIVE SUMMARY
Lending Market Landscape
P2P Lending
SME Financing Others
This is not an exhaustive list
Online Loans
WealthTech Market Landscape
This is not an exhaustive list
Personal Finance Management
Investments Platform Others
InsurTech Market Landscape
This is not an exhaustive list
Aggregators/Policy Management

8. 8
INDONESIA FINTECH REPORT 2021 – EXECUTIVE SUMMARY
Industry Point of View [1/2]
Despite contributing about 60% to the GDP and employing 97% of the workforce, micro, small, and
medium-sized enterprises (MSMEs) in Indonesia still face extreme challenges in accessing financial
services. The digital transformation of warungs can, perhaps, progressively resolve this problem.
MEDICI’s research team spoke to BukuWarung to understand the factors driving this transformation.
Here is what BukuWarung shared with us:
What are the market and regulatory dynamics driving the significance of FinTech in
Indonesia?
In emerging markets like Southeast Asia, micro, small and medium-sized enterprises (MSMEs) are
fundamental for job creation and overall economic growth. Yet, many businesses in the region
find it challenging to integrate even the most basic elements of digitalisation – spelling trouble
for their survivability during an age when technology is redefining industries and societies at
breakneck speed. Not only are they the lifeblood of the economy, but they are also important for local
communities, especially in more rural areas. BukuWarung works closely with more than 3.5 million of
these businesses across more than 750 locations nationwide – many of them act both as places
where people shop for everyday essentials and where they interact with their neighbours. The
traditional socio-economic roles of Indonesia’s MSMEs therefore cannot be understated
Globally, Indonesia has one of the most burgeoning economies. FinTech in Indonesia was valued at
$40 billion in 2019. The industry is growing at an annual rate of 49%. In such a growing financial
economy, the absence of a standardized and interoperable solution, such as India’s UPI, leaves an
opportunity to launch a digital payments solution for merchants who find it challenging to integrate
even the most basic elements of digitalization.
BukuWarung works closely with more than 3.5 million of these businesses across more than 750
locations nationwide.
Could you explain the significance of small merchants and micro-enterprises in the
economic context? What are the gaps there?
MSMEs account for 99.9% of all enterprises in Indonesia, employ 97% of the workforce, and add
61% to GDP. They are the lifeblood of the Indonesian economy and are even more important for local
communities, especially in rural areas. With Indonesia now digitizing at a rapid pace during the
COVID-19 pandemic, the economic potential cannot be fully realized if the country’s small
enterprises do not digitally transform.
In Indonesia, MSMEs find it challenging to digitalize, as most solutions are not developed for their
specific needs. None of the marketplaces are tailored for MSMEs; they are built for larger enterprises
or businesses—leaving micro-merchants underserved. To illustrate, most MSME owners do not have
powerful smartphones that can run digital solutions existing in the market. This is evident in
operational matters such as accounting, as owners continue to rely on pen and paper ledgers,
resulting in inaccurate and inefficient bookkeeping that takes almost 8–10 hours per week.
CHINMAY CHAUHAN
Co-Founder — BukuWarung

9. 9
INDONESIA FINTECH REPORT 2021 – EXECUTIVE SUMMARY
Industry Point of View [2/2]
How can technology alleviate some of these pains?
MSMEs have been left behind in the digital transformation of the nation’s business ecosystem. A key
operational challenge for the micro-businesses is their reliance on manual processes to do their
accounting and repayments with customers. As per our estimates, less than 10% of micro-
businesses use any kind of digital tools to manage their business or accounting.
Technology companies can thus play a central role in supporting Indonesia’s digitalisation efforts,
namely by introducing digital enterprise tools that cater directly to what MSMEs need. The solutions
must speak less about innovation and disruption, but more on how everyday operational matters
such as bookkeeping, stock fulfilment and receiving payments can be made easier and more
efficient. Focusing on the most basic of enterprise hurdles these businesses face helps to create a
foundation for their long-term digitalisation.
Those providing the solutions must also consider the MSMEs general technological limitations.
Hence, they must be made as lightweight as possible; the better it performs on the cheapest entry-
level device, the higher the chance of the technology’s take-up by more business owners.
BukuWarung is addressing the financial services and digitization gap among Indonesia’s 60 million
MSMEs that contribute around 60% towards Indonesia’s $1.1 trillion GDP by enabling
merchants to manage inventory, generate invoices, send payment reminders, collect payments via
invoices, and make supplier payments.
We recently launched Tokoko, a “Shopify” equivalent, to enable merchants to create online
storefronts to sell their products. Tokoko is built as a lightweight (5 MB only) app tailored towards the
mom-and-pop economy looking to get additional business and reach online customers in this
COVID-hit economy. After spending just 15 seconds setting up their shop, our Tokoko sellers have
gotten millions of impressions on their stores in just two months of launch.
How is BukuWarung placed in this segment?
BukuWarung is recording over $15 billion worth of transactions across its platform and
processing over $500 million in payments, leading the market in terms of volumes. This year, we plan
to go deep in building more products & features for several use cases of its top merchant segments
to further deepen engagement among its merchant base. We currently have a 95% market share in
digital payments among all bookkeeping apps and are empowering more than 3.5 million
businesses across more than 750 locations, and we’re just getting started.
CHINMAY CHAUHAN
Co-Founder — BukuWarung

10. 10
INDONESIA FINTECH REPORT 2021 – EXECUTIVE SUMMARY
Impact of COVID-19
Like every other country globally, the COVID-19 pandemic put a hard stop on the Indonesian
economy’s growth story. Southeast Asia's biggest economy saw growth fall by 3.49% in the
third quarter of 2020, compared to the same period in 2019, pushing it to its first recession in
22 years. However, the slump slowed down to 2.19% in October-December compared with
the same period a year earlier, showing signs of a possible recovery. The government has also
boosted fiscal support for the economy, with IDR 692.5 trillion ($49.39 billion) allocated for
pandemic relief programs last year and a similar amount being promised this year. The
government has also adopted a unique approach to vaccination by prioritizing working-age
adults over the elderly, thereby aiming to revive the economy sooner.
Social distancing norms and nationwide
lockdowns have led to greater adoption of
technology in financial services. Areas like
P2P lending have already seen a revival, with
total funding from P2P platforms reaching
IDR 113.46 trillion ($7.7 billion) with close
to 26 million borrowers.
Popular P2P platform KoinWorks has
disbursed IDR 2.5 trillion ($175.5 million) in
loans to small and medium enterprises
(SMEs) as of November 2020, a 38.8%
increase year-to-date (YTD) from IDR 1.8
trillion by 2019 year-end. Another P2P
platform, Modalku, has accumulated
outstanding loans of IDR 20 trillion to date,
disbursed in Indonesia, Malaysia, and
Singapore, which is double the figure at the
end of December 2019.
Digital payments also showed improved
performance during the pandemic. OVO
reported an increase in the volume of e-
commerce and cash top-up transactions.
DANA reported a 15% increase in
transaction volume. Since its launch at the
beginning of last year, QRIS, the
interoperable QR code system, has been
able to onboard more than 5.1 million
merchants.
These numbers are testimony to the fact
that FinTechs, with their digital distribution
models and analytics-driven consumer
assessment, play a crucial role in delivering
financial services when the rest of the
physical delivery infrastructure fails during
critical periods.
P2P Lending Digital Payments

11. 11
INDONESIA FINTECH REPORT 2021 – EXECUTIVE SUMMARY
Bank–FinTech Collaboration
Collaboration between banks and FinTech runs deep in Indonesia with various levels of
integration between the two. From opening APIs to investing in startups, banks have looked to
play an active role in fostering financial technology growth in the country. We look at two different
modes of interaction, i.e., banks investing in startups and tech companies buying shares in banks:
Banks investing in Indonesian startups
Quite a few Indonesian banks have set up venture capital funds and incubators to invest in
FinTech startups. Few examples include:
Bank Mandiri has invested in technology-based startups through Mandiri
Capital. It has invested in notable startups such as Gojek, LinkAja, KoinWorks,
Amartha, and Moka.
Bank Rakyat Indonesia holds a 97.61% stake in BRI Ventura Investama, and it
uses the vehicle to finance FinTech startups.
Bank CIMB Niaga has chosen to partner with a Singapore-based venture
capital firm Genesis Alternatives Ventures, to provide funding to startups in
Indonesia.
Private lender Bank Bukopin has teamed up with startup ecosystem builder
KIBAR to open the FinTech incubator BNV Labs.
BCA, the country’s largest private bank, has launched its venture fund, Central
Capital Ventura (CCV).
Technology companies buying stakes in Indonesia Banks
Gojek buys 22% stake in Jago Bank: In December last year, Gojek
announced that it had bought 22% in Jago bank through its payments and
financial services arm, for IDR 2.25 trillion ($159 million). The partnership
between a tech-based bank like Bank Jago and a super app like Gojek shows
Gojek’s growing interest in Indonesia's financial services market. This move will
allow Gojek's Indonesia users to open a bank account with the bank and
manage their finances through its app.
Sea acquires Indonesia’s PT Bank Kesejahteraan Ekonomi (Bank BKE):
This year, Singapore-based tech company Sea acquired Indonesia’s PT Bank
Kesejahteraan Ekonomi (Bank BKE) for an undisclosed amount. Sea has been
increasing its role in financial services across the Southeast Asia region. The
company was granted a digital bank license in Singapore, and their e-wallet
ShopeePay sees great traction in Indonesia. Since Indonesia’s regulators do not
issue any separate digital bank licenses, this approach of buying out a bank
seems to be a preferred mode that technology players are adopting to get a
foothold in the financial services market.

12. 12
INDONESIA FINTECH REPORT 2021 – EXECUTIVE SUMMARY
Open Banking and Financial
Infrastructure APIs [1/2]
Bank Indonesia has proposed the implementation of standardized Open APIs for easier
integration and interoperability between payment service providers and banks. The process,
which is currently in consultation, outlines the standards for data, technical interactions,
security, and governance. Once implemented, this standardization initiative will promote
innovation and improve interoperability between all participants in the payments system.
Although payments-led in the initial phases, in the long term, the current set of standards will
be progressively enhanced into a full-fledged open banking framework that will cut across all
aspects of finance, including KYC and credit scoring.
Barring delays caused by the ongoing pandemic, implementation is expected to begin in the
second half of 2021.
Although top banks in Indonesia started publishing APIs in select domains (mostly for
payments) a few years ago, Banking-as-a Service (BaaS) at full scale is yet to set off in the
country. In 2015, Bank Mandiri brought out its first set of payments APIs, leading to a few
successful use cases in payments, e.g., Cashlez. In 2017, Bank of East Asia published 19 APIs
on its developer portal. Among foreign banks, Standard Chartered, Citi, and DBS provide useful
consumer and commercial banking APIs tailored for the Indonesian market.
Popular Domestic Bank API Stores
Popular Foreign Bank API Stores
This is not an exhaustive list
This is not an exhaustive list

13. 13
INDONESIA FINTECH REPORT 2021 – EXECUTIVE SUMMARY
Open Banking and Financial
Infrastructure APIs [2/2]
In early 2020, Standard Chartered launched nexus, its BaaS platform, in Indonesia.
Incubated at SC ventures, nexus enables co-creation of savings, loans, and card products along
with FinTech and non-FinTech market players. Since its launch, Standard Chartered has
established partnerships with a number of third parties, including large e-commerce players, in
Indonesia.
Considering the fragmented banking landscape and the explosive growth of its internet
economy, the market and the opportunity for BaaS is vast. BaaS as a commercial proposition is
just starting to bud in the market, with a few FinTechs taking the early plunge. Brick and
Brankas provide commercially packaged APIs to improve accessibility and convenience for
their users. Nium, a Singapore-based BaaS company, has been operating in Indonesia since
2019.
Banking-as-a-Service Platforms in Indonesia
This is Illustrative, not an exhaustive list

14. 14
INDONESIA FINTECH REPORT 2021 – EXECUTIVE SUMMARY
Table of Contents
OVERVIEW
Market Dynamics and Drivers
Regulatory Canvas
The Role of FinTech in Financial Inclusion
INVESTMENT ACTIVITY
Segment-Wise Funding
Stage-Wise Funding
M&A Activity
SEGMENT ANALYSIS
Payments
Lending
InsurTech
B2B FinTech
WealthTech
ECOSYSTEM PARTNERSHIPS AND COLLABORATION
Bank-FinTech Collaboration
Open Banking and Financial Infrastructure APIs
CONCLUSION

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