Indonesia’s stock plunge isn’t tech’s problem – yet

*This article is adapted from * TechinAsia

Will we look back on March 18, 2025 as a turning point for Indonesia’s tech scene? 

The Indonesia Stock Exchange (IDX)’s composite index plunged by 6% that morning – to its lowest levels since 2021 – prompting the exchange to temporarily halt trading. On March 25, the rupiah fell to 16,642 against the US dollar, which is its lowest since the 1998 Asian Financial Crisis.

It’s not entirely surprising. Indonesia’s recent economic woes have been well documented: aside from a weakening rupiah, it is plagued by a shrinking middle class and decreasing consumption.

It’s worth noting that IDX-listed tech companies like GoTo, Bukalapak, and Blibli have largely been spared. Still, the sharp decline in the IDX that day, coupled with the rupiah’s declining value, have raised fears that investors are starting to take flight.

If true, this would be another blow for the country’s tech and startup scene after the eFishery fiasco. Meanwhile, foreign investors are concerned about a budget deficit after President Prabowo Subianto announced expensive new policies.

Experts Tech in Asia spoke with present a mixed picture. Some view these setbacks as short-term turbulences, while others cite longer-term effects for tech startups – especially with the IDX’s lack of institutional investors.

Just a “blip in the big picture”

At least, that’s how independent economist Gundy Cahyadi finds the situation. 

“I think the potential for Indonesia’s economy is still huge,” says Cahyadi. “Nothing material has changed in the past year, despite the moves in the equity market.”

Eddy Chan, founding partner at Intudo Ventures, sees both sides of the argument. “We’ve seen short-term corrections and the often knee-jerk reactions to such dips,” he explains, adding that the country had to deal with “exuberant expectations from the previous cycle.”

That said, Chan acknowledges that weakening domestic consumption has been on investors’ minds. As the general public tightens their belts, consumer-focused tech companies can feel the pressure.

One Jakarta-based investor, who asked not to be named, believes that startups targeting consumers in the middle and lower classes are most impacted. More importantly, woes are not confined to just tech players: even conventional players in the FMCG space are finding things challenging.

The IDX plunge put all of the above in very explicit terms, and on the surface, very suddenly. But it did have its omens: Cahyadi points out that the equity market has underperformed since last year, and that has intensified in 2025.

In February this year, Morgan Stanley lowered its rating of Indonesian stocks from equal weight to underweight. 

Weeks later, Goldman Sachs followed suit. It cited risks of a fiscal deficit, after President Prabowo announced slew of new and expensive initiatives like sovereign fund Danantara.

IDX: a flawed exit path?

The stock prices of IDX-listed tech firms GoTo, Bukalapak, and Blibli did not significantly fluctuate on March 18.

In fact, GoTo recorded a 5% increase in price by closing – possibly due to Grab deal rumors. It also saw strong support from foreign investors.

Still, foreign institutional investors did withdraw almost 30 trillion rupiah (US$1.8 billion) of their IDX positions between the start of the year and mid-March, CNBC Indonesia reported.

In the long run, this could be an issue for tech companies that are already public or want to be. Currently, the IDX is the most viable exit path for an Indonesian startup.

“The broader challenge is the depth of institutional capital and the ability of the IDX to sustain high-growth tech stocks over the long run,” Adrian Li, founder and managing partner at AC Ventures, tells Tech in Asia. 

Mature bourses like the US have large institutional investors, who provide “sticky capital” that can protect the market from sudden and major dips. IDX, on the other hand, relies more on individual retail investors, “who may be more spooked by price drops,” Intudo’s Chan explains.

Even so, with over US$600 billion in market capitalization, the exchange is still the largest in Southeast Asia.

Li says the IDX remains strongly interested in attracting tech listings, but he admits that those seeking deeper liquidity might benefit more from overseas IPOs – whether in the US, Hong Kong, or Singapore.

That, too, can be a challenge. Chan argues that most Indonesian tech companies are “often not exciting enough” for an overseas IPO.

“Anything under a US$5 billion valuation generally doesn’t move the needle for institutional public market investors,” he adds.

Ultimately, though, there are other ways to exit besides an IPO.

“There are and have been many instances of trade sales or secondaries for investors in Indonesia,” points out Gary Khoeng, partner at Vertex Ventures Southeast Asia and India. “These exit pathways can co-exist.”

So are M&A deals. Aside from Tokopedia’s deal with TikTok Shop, Blibli – whose parent is cigarette conglomerate Djarum Group – acquired furniture ecommerce startup Dekoruma last year.

More bang for the buck

The IDX aside, the rupiah has also continued to weaken. In April 2024, it breached the 16,000 rupiah per US dollar limit, where it currently remains.

The last time the rupiah did so was in the early throes of Covid-19 in 2020.

That would have some impact on VCs and startups. If a portfolio company lists on the IDX, the VC gets returns in rupiah, one Singapore-based regional CFO points out. Meanwhile, VCs typically repay limited partners in US dollars.

In theory, a weak rupiah could also affect valuations. An Indonesian startup would earn revenue in rupiah, but in most cases, calculating valuations would require converting the figure to US dollars.

Still, AC Ventures’ Li adds that there’s more to valuations than revenue, whether it’s profitability or growth potential.

Currency fluctuations also go both ways. Since VCs generally work on a 10-year outlook, they are less impacted by currency changes – at least not like stock markets and commodities are.

“For those looking for liquidity now, the decline in rupiah value may sting,” Intudo’s Chan explains. “But for those deploying, it is a boon in getting more bang for the buck.”

On the whole, Indonesia does have long-term structural strengths and solid fundamentals. But that may not be enough – the anonymous investor notes that some of his peers are still losing confidence in the country’s tech story.

What needs to change?

For Cahyadi, the government needs to communicate its policies more clearly.

Chan agrees, saying that investors and businesses are receiving mixed messages about Indonesia’s policy priorities and economic outlook – a “root cause of concern.”

Regardless, the Intudo partner notes that the macros – as well as the “correction” of Indonesian VC firms and startups – have led to an “overall positive market for deployment of capital, maybe the best of any year since 2015.”

“There’s a lot less noise, far fewer tourist investors, and greater alignment of expectations between founders and investors,” Chan says. “It’s a good time to build a company for serious builders, and a great time for us to be investing in Indonesia.”

Currency converted from Indonesian rupiah to US dollar: US$1 = 16,609.39 rupiah.

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