Since the startup boom of the last decade, there was a time when startup management was competing to increase their company's valuation. However, now it seems that their paradigm in managing their business has changed. While they used to focus on boosting valuations, they are now more focused on recording profits and creating sustainable businesses.
Tech in Asia's research titled Vital Signs: THE 2025 TECH IN ASIA CONFERENCE REPORT notes the changing business focus among Southeast Asian startups. 59.2% of tech company founders now prioritize growth and profitability simultaneously, up from 34.8% in 2020.
"The growth at all costs mindset is truly dead", the report states, signaling the end of startups' orientation towards valuation magnification.
From a survey of more than 100 startup founders and employees in the region, 27.7% of tech companies said they have already achieved profitability, while another 23.4% expect to achieve it within the next year.
The research also noted a decline in funding in Southeast Asia to US$1.2 billion in the second quarter of 2025, the lowest level in five years. However, nearly 40% of startup founders still plan to seek capital through corporate investment, grants, or angel investors.
This change in investment direction can be seen in Indonesia. Head of Media & PR for the Indonesian Venture Capital Association (Amvesindo) Novrizal Pratama said that investors now no longer assess companies based on the size of their valuation, but rather on their ability to create profits and business sustainability.
"Now companies that are assessed are not those with large valuations, but those that are sufficiently sustainable and have a path to profitability," he said.
Novrizal said this trend began to appear in 2023, when a number of companies with weak foundations failed to maintain performance. According to him, changes in global conditions and the Fed's interest rate policy have also tightened funding flows. Therefore, investors are now cautious as raising funds from liquidity providers is not as easy as in previous years.
The funding situation in Indonesia is still depressed due to the economic slowdown and increased investor caution. Novrizal assessed that the conditions he referred to as tech winter made it difficult for many startup founders to obtain new capital.
He also mentioned a number of legal cases in the technology sector such as eFishery, Investree, and TaniHub that reinforced investors' cautious attitude.
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The research from Tech In Asia also shows that 34.6% of respondents rated the quality of corporate governance in Southeast Asia as poor or very poor, while 50% rated it as average. The series of cases in the tech sector is said to reinforce the view that improving governance is an important factor for the investment ecosystem to remain trusted.
Thus, the governance aspect is now a major concern before investors disburse funds. Novrizal said investors demand financial and sales reports that have been audited by competent institutions. He said the practice is a key requirement in the funding process and is an important lesson for investors and startup founders to improve governance. "If it is absolute, it is absolute," he said.
In addition to funding from venture capital, investment sources for startups in Indonesia are becoming more diverse. According to Novrizal, large companies and state-owned enterprises have begun to seek innovation through partnerships with technology startups to improve business performance. He also said that the interest of angel investors remains because they use personal funds and move according to their own tastes.
Still in the research, 39.6% of startup founders in Southeast Asia said they would seek funding in 2025 by considering corporate investment, grants, and angel investors as alternatives amid the sluggish venture capital climate. This trend shows the emergence of new strategies to sustain business growth in the technology sector.
According to Novrizal, Amvesindo believes that the change in focus of startups towards profitability requires a clear direction to keep growth balanced. Novrizal said that the technology developed must be appropriate and able to answer the real needs of the market. He added that regulatory support is also needed so that startups can innovate without losing room to grow amidst the limited purchasing power of the public.
Examples from Indonesia: Bukalapak and Blili
The shift in focus towards profitability can also be seen from Bukalapak's performance in the second quarter of 2025. Previously in July, PT Bukalapak.com Tbk (BUKA) recorded a 12% increase in revenue from Rp 1.5 trillion to Rp 1.6 trillion compared to the previous quarter. The company said this growth was mainly driven by the positive performance of the gaming and investment segments which are now the main pillars of revenue.
Efficiencies made by the issuer coded BUKA in the last few quarters have begun to show results. Adjusted EBITDA improved from minus Rp 20 billion to minus Rp 14 billion, while net profit jumped 218% quarter-on-quarter to Rp 355 billion. The company also reduced general and administrative expenses, which helped strengthen the business structure towards profitability.
As of the end of June 2025, Bukalapak recorded cash and liquid investments of IDR 18.5 trillion, providing strong room for long-term expansion. With a healthier financial foundation and contributions from Bukalapak's Gaming, Retail, and Partner segments, the company said it is ready to continue its sustainable growth in the second half of the year.
"Our transformation is starting to show real results, with a business structure that is increasingly lean, focused and productive," said Victor Putra Lesmana, Director of BUKA in an official statement.
A similar trend was also seen in the performance of PT Global Digital Niaga Tbk or Blibli. In the first half of 2025, Blibli recorded net revenue growth of 22% or equivalent to Rp9.6 trillion. This positive performance was supported by an increase in all business lines, especially in the electronic retail, lifestyle, and travel segments.
"We believe this will put us in a good position to achieve sustainable growth throughout the rest of the year," said Ronald Winardi, Chief Financial Officer of Blibli in an official statement.
Blibli also continues to expand its business. As of the end of June 2025, the company has operated 223 electronic stores, 58 premium supermarkets, and 36 home and lifestyle experience centers. The company said this expansion is part of its strategy to strengthen its omnichannel network while maintaining consistent growth amidst intense market competition.
Indonesia is a potential market
In line with Novrizal, Director of Digital Economy at the Center of Economic and Law Studies (CELIOS) Nailul Huda said that the change in startup orientation towards profitability has occurred since the tech winter in 2023. The tighter liquidity conditions make investors demand a faster return on capital. "Those who previously did not mind not making a profit in 10 years, must make a profit in a few years," he said.
According to Huda, this change marks a shift from the old pattern in the 2010 to 2017 era when many startups focused on pursuing valuation without considering business sustainability. Now, according to him, the determining factor for investor confidence lies in the ability to generate profits or at least have a clear business path to profit.
Although global pressures such as the Fed's interest rate policy make capital flows to the technology sector tighter, the prospect of the digital economy in Indonesia, for Huda, remains attractive. According to him, Indonesia remains the target of global technology players because it has a potential market. "Growth, although not exponential, is still positive," he said.
