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Indonesian tech frenzy tantalizes venture capital
JAKARTA, INDONESIA (AP) - Venture capitalists from Silicon Valley to New York all have the same question about Indonesia’s come-from-nowhere tech frenzy: Are the young entrepreneurs that have piqued their interest smart bets or just surfing a hype that will soon burn out.
A few years ago, Internet connections were so slow in Indonesia that trying to download a clip off YouTube could take 20 minutes on a good day.
Now the Muslim majority nation of 240 million people _ despite the tangled balls of telephone wire that dangle precariously over dusty, potholed roads _ boasts the world’s second largest number of Facebook users and is third for Twitter.
It’s also seen an explosion of Web startups, with 200 popping up so far this year alone, said Natali Ardianto, owner of StartupLokal, which offers a place for founders, developers and potential investors to meet.
At the moment most of Indonesia’s tech newbies aren’t distinguished by their creativity. Many are clones of well-established foreign companies like Craig’s List or TripAdvisor, or Groupon, offering discount coupons and deals.
But with a little nurturing and eventually funds to advertise and strategize, venture capitalists and small-scale investors hope one day to make some money and _ maybe, along the way _ help discover Indonesia’s answer to Mark Zuckerberg.
“It’s still early and there isn’t much structure on the ground,” said Faysal Sohail, managing director of CMEA Capital, one of the leading venture capital firms in Silicon Valley, after a whirlwind trip to Indonesia.
“But from a growth point of view, India and China has been predominantly done at this stage, there are a lot of investors there already,” he said. “So now the question is, what are the markets beyond that.”
That’s partially why I came,” he said, “to look for some new, world class entrepreneurs.”
He’s ready to invest some money, he said, but personally, not yet through a fund.
Most of the founders of new startups are young, recent college grads working from their living rooms or garages with two to six people, using cash scraped together from their parents, friends and professors.
In the majority of cases, the operations are considered too small to be able to handle infusions of more than $500,000 to $2 million. And business plans are still pretty rudimentary.
But there are several promising young entrepreneurs out there, Sohail and others said.
Twenty-six-year-old Eduardus Christmas, who hit the scene two years ago, is considered one of the early birds.
Inspired by his literature-loving girlfriend, he started Evolitera, an online publishing house offering thousands of free novels, textbooks and scientific papers.
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