Analyst Note: The "Paper Mark" era is effectively over. In 2021, VCs celebrated "Unrealized Gains" based on soaring valuations. In 2025, Limited Partners (LPs) are demanding DPI (Distributions to Paid-In Capital). Cash. With the IPO window largely shut and M&A activity subdued, a shadow market for secondary liquidity has emerged. This report analyzes how founders and early investors are seeking liquidity without ringing a bell at the stock exchange.
Market State: The Liquidity Drought
-61%
Funding YoY
Jan–Sep 2025 vs Jan–Sep 2024 (Tracxn)
US$167M (30 rounds) vs US$428M (77 rounds)
13
Q4 2024 Deals
6-Year Low (reported)
30–50%
Secondary Discount
vs Last Preferred Round
11
Quarters of Decline
Consecutive through Q4 2024 (reported)
- /// The IDX Freeze: Post-IPO performance of tech stocks (down >70% from highs for some, per industry reporting) has dampened institutional appetite for new tech listings.
- /// The PE Pivot: Private Equity firms are shifting from "Growth Equity" (minority stakes) to "Buyouts" (control stakes) or Secondaries. Ares Management reportedly agreed to take over control of several Northstar Group-managed funds/assets in 2025.
- /// The Discount: Secondary transactions are reportedly clearing at 30–50% discount to the last official preferred round valuation.
- /// The Scandals: High-profile cases (eFishery, Investree) have increased investor caution and due diligence requirements across the market.
Source: Tracxn (funding YoY); industry reporting for other figures.
01. The Broken IPO Escalator
For a decade, the Indonesian venture promise was: "Build, Grow, IPO on IDX (or NASDAQ)."
That escalator is largely broken. The poor performance of the 2021–2022 IPO class has spooked retail investors and pension funds (BPJS/Taspen), per market commentary. Indonesian tech stocks have significantly underperformed traditional sectors.
| Exit Route | Status (2025) | Commentary |
|---|---|---|
| IDX Main Board | DIFFICULT | Domestic institutions rotating to Coal, Banking, and Telco (dividend-yielding assets), per market commentary. Tech IPO appetite is subdued. Indonesia's framework allows Multiple Voting Shares (MVS) under OJK Regulation No. 22/POJK.04/2021; IDX issued implementing rules in late 2024, but uptake has been limited. |
| NASDAQ / NYSE | HIGHLY SELECTIVE | Reportedly viable only for companies with $500M+ revenue and strong governance. Traveloka has been cited as a potential candidate; few others qualify. |
| SPAC Merger | EFFECTIVELY CLOSED | The SPAC boom has collapsed globally. Kredivo's $2.5B SPAC deal was cancelled in 2022 due to market conditions. Not currently a viable path. |
| Hong Kong Listing | SELECTIVE | J&T Express listed in HK (Oct 2023). Shares have traded below IPO price in subsequent periods (reported). Viable for large-scale logistics/consumer plays with regional footprint. |
The 2021–2022 IPO Class: A Cautionary Tale
GoTo Group (GOTO.JK)
IPO: April 2022
Down >80% from IPO (approx.)
Multiple rounds of layoffs. TikTok (ByteDance) agreed an investment giving it control of Tokopedia (75.01%), reported at $840M.
Bukalapak (BUKA.JK)
IPO: August 2021
Down ~86% from IPO (approx.)
Announced it stopped selling physical products (Jan 2025). Pivoting to virtual products.
Blibli (BELI.JK)
IPO: November 2022
Stable / Up from IPO
Exception: Djarum Group backing. Omnichannel strategy with Tiket.com integration.
Note: Market caps fluctuate. Figures are approximate and based on public reporting as of late 2025.
Indonesia's framework allows MVS for tech listings under OJK Regulation No. 22/POJK.04/2021; IDX issued implementing rules in late 2024. Regulatory support for tech IPOs has increased.
New Development: Danantara State Investment Platform
Indonesia established Danantara (Badan Pengelola Investasi Daya Anagata Nusantara) as a new state investment platform to manage SOE assets/dividends and optimize investments, following Indonesia's SOE law amendment (Law No. 1/2025) and its implementing regulation (Government Regulation No. 10/2025). Launched in 2025, it is positioned to act as a driver in VC/PE transactions similar to GIC or Temasek.
Implication: Danantara could become a significant liquidity provider for Indonesian startups—either as a direct investor, co-investor alongside PE firms, or as a buyer of last resort for strategically important companies. Operational scope and mandate are still evolving.
02. The Rise of "Secondaries"
If you can't sell the whole company (M&A) or list it (IPO), you sell your shares privately. This is the Secondary Market.
Founders and early employees (who have been vesting for 5+ years) are often "Paper Millionaires" with limited actual liquidity. The pressure for exits is mounting as fund lifecycles approach their limits.
Specialized Secondary Funds and Family Offices are reportedly active buyers. They offer cash for shares in "Blue Chip" startups (Series B/C stage) but at significant discounts.
Key Players (reported): Global secondary specialists, regional family offices, and some strategic corporates looking to build positions ahead of potential IPOs.
Buyers typically price on Common Stock multiples, not the "Preferred" price of the last round. Liquidation preferences and anti-dilution provisions often make common stock worth significantly less.
Example: Last round was $10/share (Preferred with 1x liquidation preference). Secondary buyers might offer $5-6/share (Common equivalent). Take it or leave it.
Secondary Market Dynamics in 2025
ROFR Waivers
Existing investors usually have a Right of First Refusal (ROFR). In 2025, many VCs are reportedly waiving ROFR because they lack capital for follow-on investments, allowing external secondary funds to enter the cap table.
Tender Offers
Some companies are facilitating structured tender offers, allowing employees and early investors to sell a portion of their shares at a company-approved price. This provides controlled liquidity while maintaining cap table integrity.
GP-Led Secondaries / Continuation Vehicles
Some fund managers are reportedly exploring continuation vehicles—transferring assets from expiring funds into new vehicles to extend hold periods and wait for better exit conditions.
LP Pressure for DPI
Limited Partners are reportedly demanding DPI (Distributions to Paid-In Capital) rather than accepting paper marks. This is forcing GPs to seek liquidity events even at discounted valuations.
Northstar reportedly considered two options: transferring assets into a continuation vehicle or finding a new sponsor. Ares emerged as the preferred path (reported August 2025).
03. Strategic M&A: The Conglomerate Bid
The "Dragons" of Indonesia—Djarum, Sinar Mas, Lippo, Salim, Emtek—are cash-rich. They have become significant buyers in the current environment.
| Conglomerate | Investment Arm | Notable Investments / Acquisitions | Strategy |
|---|---|---|---|
| Djarum Group | GDP Venture, Merah Putih Inc. | Blibli (owns), Kaskus, DailySocial, Tiket.com. Acquired Bakmi GM (2024, reported). | Ecosystem builder. Full ownership or majority stakes. Integrates into BCA/retail ecosystem. |
| Sinar Mas Group | SMDV, Latitude Venture Partners, EV Growth | Tokopedia (early), Female Daily, HappyFresh. Smartfren-XL merger in progress. | Portfolio approach. Multiple vehicles for different stages. Active in healthtech, fintech. |
| Lippo Group | Venturra Capital, Lippo Digital Ventures | MatahariMall (shut down), OVO (exited). Siloam Hospitals sold to Sight Investment (2024). | Real estate integration focus. Less active after MatahariMall challenges. |
| Emtek Group | Emtek Digital, various direct investments | Vidio (reported $1B valuation, May 2025), Bukalapak (investor). Media/content focus. | Media ecosystem builder. Content + distribution synergies. |
| Salim Group | Indofood subsidiaries, direct investments | Various FMCG supply chain investments. Focus on food/agriculture tech. | Supply chain integration. Acquires for operational synergies. |
Note: Investment activities based on public reporting. Strategies may evolve.
The "Buy vs. Build" Shift
In 2021, Conglomerates often tried to build their own "Super Apps." Many reportedly struggled (e.g., MatahariMall). In 2025, they have returned to acquisition, but with different criteria:
- The Target: Profitable (or near-profitable) B2B SaaS, Logistics, Fintech, or companies with strategic data/customer assets.
- The Valuation: 6x-12x EBITDA (Private Equity multiples) rather than 10x Revenue. Earnings quality matters.
- The Integration: Absorption into the Conglomerate's ecosystem. The startup brand may survive, but back-office is often consolidated.
- The Due Diligence: Post-eFishery, forensic accounting and governance checks have reportedly become standard.
Notable M&A Activity (2023–2025, Reported)
TikTok (ByteDance) agreed an investment giving it control of Tokopedia (75.01%), reported at $840M, with a stated commitment of up to $1.5B over time. Strategic play for social commerce.
Voluntary tender offer for Lippo Group's healthcare arm. PE-style acquisition of healthcare assets.
Acquisition of prominent restaurant chain by Djarum Group. Traditional business integration.
P2P lending startup acquiring a leasing company for expanded financial services footprint.
Sinar Mas-controlled Smartfren reportedly merging with XL Axiata. Telecom consolidation play.
04. The "Acqui-hire" (Soft Landing)
For startups in the "Zombie Zone" (stalled growth, dwindling cash, unable to raise), the likely outcome is an Acqui-hire—acquisition primarily for talent, with minimal or no value for existing shareholders.
Note: In most acqui-hires, Common Stock (Founders/Employees) gets wiped out due to Liquidation Preferences of investors. If the company raised $50M at 1x liquidation preference and sells for $20M, common shareholders typically receive nothing. The "retention bonus" may be the only compensation founders see.
Understanding Liquidation Preferences
What it is: Liquidation preferences determine the order and amount investors receive before common shareholders in a sale or liquidation event.
Standard terms: Most Indonesian VC deals reportedly include 1x non-participating liquidation preference. Some later-stage deals may include participating preferences or higher multiples.
2025 trend: VCs are increasingly demanding stronger protections in down rounds: higher liquidation preference multipliers, enhanced anti-dilution rights, and expanded governance/information rights.
Example: Startup raised $30M total at various valuations. In a $25M acqui-hire:
• Investors with 1x liquidation preference receive their $30M back first
• But only $25M is available → Investors receive $25M pro-rata
• Common shareholders (founders, employees) receive $0
05. Private Equity Buyouts
A notable trend is the PE Majority Recap—Private Equity firms acquiring control stakes in startups that have achieved scale but are "stuck" on the venture path.
Firms like Northstar (now part of Ares), CVC Capital Partners, and global players (KKR, TPG, Warburg Pincus) have varying degrees of activity in Indonesia.
| Firm | Indonesia Focus | Notable Deals / Status |
|---|---|---|
| Northstar Group (now Ares) | High | Early Gojek investor. Acquired by Ares Management (2025). Fund V reportedly backed by ADB ($39.5M). Historical IRRs of early funds varied significantly. |
| CVC Capital Partners | High | Matahari Department Store, Siloam Hospitals (historical). Consumer and healthcare focus. Listed via IPO in 2024. |
| TPG Capital | Moderate | Co-investor with Northstar historically. Bank Tabungan Pensiunan Nasional, BFI Finance (reported). |
| Affinity Equity Partners | Moderate | Reportedly involved in Vidio valuation discussions. Consumer/media focus. |
| Falcon House Partners | High (Indonesia-focused) | Controlling stakes in middle-market consumer companies. Local expertise. |
The PE firm buys 51%+ of the company. They buy out tired Seed/Series A investors (giving them an exit). They may inject fresh capital. They typically install operational improvements (often replacing the CFO). They steer the company toward cash flow and eventual trade sale or IPO in 5–7 years.
Why it works for founders: Founders may retain significant upside while getting partial liquidity. PE firms are often more patient than VCs and less focused on hyper-growth.
Indonesia's long-term fundamentals remain attractive, but skeptics note that family groups continue to acquire the best mid-cap assets, limiting PE's traditional buyout model.
06. The State of Venture Returns
The uncomfortable truth: Many Indonesia-focused VC funds have reportedly struggled to deliver strong returns. Extended hold periods have compressed IRRs even for funds with decent money multiples.
The Return Challenge (Illustrative)
According to ION Analytics reporting on Northstar's fund performance:
Fund I
22.9% IRR
2.8x MOIC
Fund II
4.3% IRR
1.3x MOIC
Fund III
2.3% IRR
1.2x MOIC
Later Funds
TBD
Still in investment period
Source: ION Analytics (August 2025). Past performance is not indicative of future results. Individual fund returns vary significantly.
Why Returns Have Been Challenging
- 1. Extended Hold Periods: Many investments made in 2015-2019 still haven't exited. Time erodes IRR even if eventual returns are positive.
- 2. Currency Depreciation: The Indonesian Rupiah has depreciated ~45% against USD since 2011. Dollar-denominated returns suffer.
- 3. Limited Exit Options: IPO window largely closed. M&A market thin. Secondary discounts compress values.
- 4. Governance Issues: High-profile fraud cases (eFishery, Investree) have damaged sector reputation and LP confidence.
- 5. Power Law Failures: The "one big winner pays for the fund" model requires massive exits. Few Indonesian startups have achieved venture-scale exits.
07. Framework for Founders: Planning Your Exit
Exit Planning Matrix
| Your Situation | Likely Exit Path | Timeline | Key Actions |
|---|---|---|---|
| Profitable + Growing | IPO (IDX/HK), Strategic M&A, PE Recap | 2–5 years | Hire CFO, clean up governance, prepare audit trail, engage investment banks |
| Scaling + Burning | Strategic M&A, Secondary, Down Round | 12–24 months | Extend runway, cut burn, identify strategic acquirers, explore venture debt |
| Stalled + Low Cash | Acqui-hire, Asset Sale, Wind Down | 6–12 months | Negotiate retention packages, identify acqui-hire targets, protect team |
Do This
- ✓ Maintain clean cap table and governance records
- ✓ Build relationships with potential acquirers before you need them
- ✓ Consider structured secondary for partial founder liquidity
- ✓ Communicate regularly with existing investors about exit strategy
- ✓ Prepare for forensic-level due diligence (post-eFishery standard)
Avoid This
- ✗ Waiting for the "IPO window to open" without a backup plan
- ✗ Ignoring liquidation preferences in exit negotiations
- ✗ Running out of cash before starting M&A conversations
- ✗ Assuming previous round valuation is achievable in M&A
- ✗ Neglecting employee equity holders in exit planning
The New Reality: Profitability is Independence
"The only way to control your exit is to not need one. If you are profitable, you can wait out the IPO freeze and negotiate from strength. If you are burning cash, you are a distressed asset, and the market will price you accordingly."
In 2025, the founders with the most options are those who built sustainable businesses—not those who raised the most money.
Key Takeaways
Sources & Further Reading
- • Industry funding reports and databases
- • Chambers & Partners - VC/M&A Indonesia guides
- • ION Analytics - Northstar Group coverage (August 2025)
- • Tracxn - Indonesia startup data
- • DailySocial.id - Indonesia startup funding reports
- • Company announcements and press releases
Where possible, figures were cross-referenced against primary sources and reputable reporting. This insight does not constitute investment or legal advice. Last updated: December 2025.