Whispers of governance lapses, survival strategies, layoffs, and operational shutdowns were fairly frequent among Indonesian startups this year.
Most recently, aquatech giant eFishery shocked the ecosystem by announcing the replacement of its co-founders Gibran Huzaifah and Chrisna Aditya amid a probe into alleged financial irregularities. While there are no indications that eFishery’s operations are impacted, the news of the turmoil, at a celebrated unicorn, sent ripples through an industry already grappling with trust issues and sparked anxiety over damage to investor confidence.
Equity funding in the country was already at a six-year low in the third quarter of 2024, according to data compiled by DealStreetAsia.
While startup shutdowns this year were fewer than in 2023, layoffs were more frequent than last year, signalling a shift toward long-term survival strategies.
Despite this, the year wasn’t without casualties. Ula, an e-commerce player backed by Jeff Bezos, is rumoured to have shuttered after undergoing hibernation and three waves of layoffs since last year. Two of its co-founders, Riky Tenggara and Derry Sakti have moved to another venture, leaving Nipun Mehra and Alan Wong in the company according to their LinkedIn profiles.
Regulatory interventions compounded the challenges. The Financial Services Authority (OJK) revoked the business licence of Tanifund in May and Investree in October highlighting the continued strain on agritech ventures. Both startups have been facing major financial crises following allegations of fraud since last year. Investree’s subsidiaries in Singapore and Thailand still operate, though its arm in the Philippines announced it will be winding down in Sept. 2025.
In July, Pitik, an agritech startup that empowers Indonesian chicken farmers, ceased operations, while in October alone there were two official closures announced by Djarum-backed GetPlus and Salt Ventures-backed D2C startup Syca.
Edtech startup Zenius, which had announced a temporary shutdown on Jan. 4, made a comeback in July 25 after six months of hibernation.
Meanwhile, Bukalapak’s quick commerce division Kingkong Meats will officially shut down by Dec. 31, 2024, as per an announcement. The company had announced plans to narrow down its focus to Mitra Bukalapak, gaming, investment, and certain retail services.
Layoffs to avert complete shutdown
While complete shutdowns were relatively few this year, layoff announcements rolled in from prominent names like Laku6, Xendit, and Flip in January, followed closely by Waresix, Edenfarm, Fazz, and GoTo-backed Mapan in February.
The trend persisted throughout the year, and very few sectors were spared. Major players such as Tokopedia, eFishery, and Bukalapak were among the notable companies trimming their workforce, with Bukalapak’s announcement coinciding with its unaudited Q3 2024 financial results.
Even as some like B2B construction startup Gravel shuttered entirely even after announcing layoffs, and others like FishLog opted for the M&A route after severe downsizing, the narrative was consistent: layoffs became a vital strategy for survival.
MDI-backed PrivyID and Softbank-backed healthtech firm Alodokter have also undertaken layoffs. While Alodokter has admitted to letting go of dozens of its employees, a source said that hundreds have been laid off at PrivyID. DealStreetAsia had not received official responses from the companies till the time of publishing this article.
Most recently, Indonesian SME-focused SaaS startup Mekari laid off 5%, or about 70, of its staff as part of its strategic focus to realign resources and prioritise high-impact initiatives.
Edward Chamdani, treasurer of the Indonesia Venture Capital Association for Startups (AMVESINDO), who also serves as general partner at Braxton Capital, said investors increasingly view layoffs as a necessary step to preserve capital. By cutting non-essential divisions and focusing on core products and services, startups can streamline their operations and extend their cash runway to survive the downturn.
“Shutting down remains a last resort since it requires investors to write off their investments, which is not the preferred outcome,” Chamdani told DealStreetAsia.
Admond Lee, a former startup founder and author of Runway Ventures, a weekly newsletter on startup failures, emphasises that layoffs, though painful, are often a better option than complete shutdowns. “It might make more sense to have layoffs (short-term pain) to cut down costs, trim the fat, make operations more efficient, iterate business models to accelerate the path toward profitability — all while waiting for the funding climate to come back without dying,” said Lee.
He adds that startups able to navigate this challenging funding environment may eventually raise more funding rounds to continue their growth.
Lean structures
Rexi Christopher, venture partner at Init-6, highlights that startups founded in the past two years are inherently leaner, having been built with efficiency in mind. These companies are designed to operate with minimal overhead, making them more resilient in the face of economic challenges.
“In contrast, older startups with more complex structures are now actively seeking ways to optimise their operations and reduce cost,” Christopher said.
He also underscores the importance of sustainable growth over rapid expansion. “Efficiency is no longer just a survival tactic — it’s a fundamental business strategy,” he said. Companies that focus on lean operations and strategic growth are more likely to attract future investment and achieve long-term success.
AMVESINDO’s Chamdani further explains that the market correction, which began in the US in early 2020, reached Southeast Asia, including Indonesia by mid-2022. By then, many startups had already received funding from pre-existing allocations, but the realisation of market correction prompted a shift in priorities.
Indonesian startups responded by focusing on cost efficiencies to extend their cash runway to at least 24 months. This approach involved operating with leaner teams and minimal expenses. Meanwhile, investors, particularly limited partners (LPs), redirected capital to other regions or retained it as dry powder.
“These measures helped many startups adapt and sustain through 2024, while less-prepared startups faced closures in 2023,” said Chamdani. “This approach enhances their ability to weather difficult periods and positions them to seize opportunities when market conditions improve.”
Despite fewer closures in 2024, both Chamdani and Lee caution against complacency. The current trend of layoffs over closures may not be sustainable, potentially leading to a wave of shutdowns in the near future.
“The fact that closures are down in 2024 suggests the market correction may have peaked,” Chamdani noted. “But maintaining this trend will require startups to continue adapting to changing market conditions.”
Lee, however, offered more cautious predictions. “Layoffs are only the beginning,” he warned. “In the next 6-12 months, we could see more startups closing, either publicly or quietly. Many are not being killed by external forces — they’re committing suicide by failing to adapt.”
Christopher emphasises the importance of careful market analysis and a trial-and-error approach to identifying sustainable business models. This approach aligns with the investment philosophy of Init-6, which prioritises companies with robust, scalable models over those focused solely on short-term growth, he said.
