WILL EDUTECH AND HEALTHTECH BE THE NEXT UNICORNS?
Seeing the potential of education and healthcare to be the next big thing in Indonesia’s digitalization.
Education and health are the sectors that seem to be the next big of unicorns in the future. The next founder or CEO perhaps sees these factors because they want to answer the problem that society is facing currently, mainly after we experience the pandemic period.
What does Unicorn mean?
"Unicorn" is a term used in the venture capital industry to describe a privately held startup company with a value of over US$1 billion. The term was first popularized by venture capitalist Aileen Lee, founder of Cowboy Ventures, a seed-stage venture capital fund based in Palo Alto, California (Investopedia, 2021). Indonesia has at least six startups that are successfully titled as a Unicorn, they are Gojek, Bukalapak, Tokopedia, Traveloka, OVO, and JD.ID.
What Indonesia government plan to add unicorn startups
Through National Mid-Term Development Plan, the Ministry of Communication and Informatics of Indonesia (Kemenkominfo) target to push the new unicorns’ existence in 2024. Therefore, the number of active startups is targeted to grow to 35 startups in Indonesia. So, in 2024, the number of startups in Indonesia can increase to 150 startups.
This potential has a strong reason as Indonesia is predicted to increase its economic growth due to digitalization up to 200 million USD in 2025. Even so, Indonesia has a lot of challenges that need to be faced, like internet infrastructure, data security, ecosystem integrity, and manufacturing local products.
Potential of edutech and healthtech
The rapid development of the startups in Indonesia is a sign that we have huge potential to emerge as the next unicorns. Education and health are considered to be the big future of the digital economy in this country. This opportunity is also supported by the data from World Economic Forum (WEF) which states that online learning and healthcare application are increasing in ASEAN due to the pandemic. The opportunity for edutech and healthtech to be the next unicorns also comes from government support where 20% of the government's state budget is allocated for education spending, while healthtech has 5% of the state budget.
Minister of Communication and Information Rudiantara said companies in education technology (edutech) in Indonesia have the potential to become unicorn companies. Broadly speaking, he said there are three types of startups that are likely to become unicorns in Indonesia, namely edutech, healthtech, and fintech.
"I always say that the next Unicorn would be education. This is because based on the constitution, 20 percent of the state budget must be spent on education," explained Rudiantara, the Indonesian minister of communication and information.
For the second type, Rudiantara noted that health tech also had great opportunities, because the number that will be produced is not small.
"Based on our Constitution, we have to allocate 5 percent to health. Again, 5 percent is approximately Rp 100 trillion more spent. One percent is already an unusually large number," he explained.
"And do not forget Fintech. Investors are happy with companies with high transparency. This means that the market will suddenly rise," Rudiantara pointed out.
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