Indonesia’s Startup Scene Didn’t Fail. It Was Designed This Way.
Inside the unraveling of Indonesia’s startup ecosystem. Who built the bubble, who cashed out, and why silence protects the same players every time.
Not long ago, Indonesia was the future. Investors and founders recited the same mantra: 270 million people, a rising middle class, and the chance to skip straight to an app-driven utopia. Pitch decks screamed “The next China!” and nobody seemed to care whether that comparison had any grounding beyond ambition and scale.
Billions flowed. Startups were anointed unicorns before they had working revenue models. IPOs were celebrated before profits even entered the conversation. Founders became icons, paraded across panels, covers, and podcasts, selling dreams with the confidence of seasoned televangelists.
Now? The party is over. And it's eerily quiet.
Each week another “world-changing” startup closes with barely a whimper. Investors mumble about “macro conditions,” founders retreat to Bali for “reflection,” and thousands of employees hold stock options that are worth less than the paper it was promised on.
The official story? “Growing pains.” “Naive founders.” “Market immaturity.”
The real question is far darker: what if none of this was an accident at all?
Smart People Don’t Accidentally Burn This Much Money
The soothing narrative goes like this: the Indonesian startup collapse was simply ambition outpacing reality. Founders “dreamed too big.” Investors “overestimated the market.” A few reckless bets were made (oops!) and then everything toppled over. It's a cute story. Comforting, even. And it is absolute nonsense.
These weren’t clueless kids hunched over laptops in their parents’ garages. These were ex-McKinsey consultants, Ivy League MBAs, Bain alumni. People who can model imaginary revenue streams on spreadsheets for markets that don’t even exist. People trained to spot risk, structure, and sustainability before breakfast.
They knew the rules:
Don’t fill your C-suite with your old classmates.
Don’t pay customers to use your product indefinitely.
Don’t grow so fast you forget the “business” part of “business model.”
And yet, each of those rules was broken, repeatedly and with precision. Which leaves us two possibilities: either this entire brain trust suddenly developed collective amnesia, or they knew exactly what they were doing, and “sustainability” was never part of the plan.
The proof is in who walked away whole.
Founders cashed out early through secondary sales.
Executives collected oversized salaries and golden exits.
VCs booked “paper gains” and moved on.
The only people left standing in the rubble? The employees who believed, the small suppliers who trusted, and a generation sold the promise of a tech revolution that, in hindsight, looks less like miscalculation and more like a cash grab disguised as progress.
Nepotism: The Secret Business Model
The Indonesian startup scene loved to present itself as a meritocracy. The narrative was simple.
The “best and brightest” would lead,
Ideas would win on their own merit,
Anyone with talent could climb.
The reality was closer to a members-only club.
If you had the right university crest on your résumé, you were instantly labeled “leadership material.”
If your surname carried a certain weight, you were “trusted” without question.
If you had the good fortune of being in the same brunch circle as a founder’s investor, you were suddenly “Head of Strategy.”
This wasn’t simply careless hiring or a scramble to fill roles. Filling key positions with people from the same tight network created insulation. It guaranteed no one in those boardrooms would rock the boat by saying what needed to be said: that the math didn’t add up, that the burn rate was absurd, that the “path to profitability” was a fantasy.
Instead, there were smiles. There were nods. And there was silence, because silence kept the network safe.
When the inevitable collapse arrived, that same network cushioned the fall for insiders. Founders reemerged with new ventures. Executives landed advisory roles. Investors shifted to their next fund. Meanwhile, employees, contractors, and ordinary believers in the dream were left to sweep up the wreckage.
What was sold as a meritocracy turned out to be an exercise in looking after one’s own. It created companies that looked diverse on their pitch decks but functioned as closed ecosystems, where privilege doubled as job security and accountability was always optional.
The Venture Capital Carousel: How to Make Money Without Building Anything
Here is where the conspiracy stops whispering and starts speaking plainly. The funding machine was not broken. It was functioning beautifully for the people who designed it.
Venture capitalists raised money from LPs desperate for exposure to “the next big thing.” The story was irresistible: Indonesia as the “next China,” a market waiting to be unlocked, fortunes waiting to be made. With capital secured, VCs sprayed it across any startup with a slick deck and words like: “super app,” “market dominance,” “disruption.” Substance was optional as long as the sizzle sold.
Each round lifted valuations higher, whether the fundamentals made sense or not. VCs marked up their books and showcased “returns” to LPs. More money rolled in, the cycle spun faster, and everyone looked brilliant on paper.
Did anyone genuinely believe these companies, the same ones that were throwing money at discount wars and scaling beyond their own ability to manage operations, were quietly inching toward profitability? Or was the game simply to keep the illusion alive long enough for insiders to cash out?
The timing speaks volumes. Founders sold shares in Series A/B. VCs booked their markups. Executives collected salaries that could fund small nations. And when the carousel slowed? Suddenly it was: “macro headwinds,” “investors got skittish,” "these things happen.'
Billions gone. Accountability missing. The carousel had done its job. The insiders had already stepped off, clean and dry, while everyone else was left spinning.
The Choreographed Silence of Collapse
Perhaps the most damning part of this saga is not the crash itself but the quiet that followed. In other ecosystems, when a startup implodes, there is often an autopsy. Founders publish raw, uncomfortable essays about their mistakes. Investors offer post-mortems, sometimes with real self-critique. The failures are dissected in public so others can learn what went wrong.
In Indonesia, there is none of that.
Startups slip quietly out of existence.
A carefully worded LinkedIn post thanks “our incredible team and supporters.”
Founders fade away, only to reappear months later as “advisors” or “entrepreneurs in residence.”
Venture firms quietly mark the investment to zero and move on to the next fundraise.
Employees sign NDAs and are politely told to “move on.”
This is not just cultural restraint or discomfort with confrontation. It feels deliberate, almost rehearsed.
Real transparency would mean actual admissions. Things like: we knew the model didn’t work; we knew we were hiring our friends instead of qualified people; we knew the board was there for show, not oversight.
Admitting that would mean naming names and acknowledging that the game was played knowingly. And too many people were benefitting while the music was still playing.
So instead there is strategic silence. The kind that protects reputations, enables second chances for the same people, and ensures the carousel is ready to spin again when the next big “wave” comes.
Indonesia’s startup boom wasn’t simply a bubble that burst under the weight of naïve optimism. It looked, in hindsight, almost like a well-engineered extraction scheme. Billions flowed in, cheered on by headlines and pitch decks. A select circle of founders, early executives, and certain venture capitalists took their slice, secured their exits, and prepared for their next ventures. When the inevitable collapse came, they slipped away untouched, already plotting the next round of “disruption.”
That is the part few want to articulate. Saying it out loud means admitting the ecosystem was built on those flaws.
So the real question is not how to “revive” the scene. It’s whether we even should if it means inviting the same players to run the same playbook.
Without a public reckoning, without real accountability and a break in the silence, the pattern will continue. Glossy branding, big promises, and quiet exits.
At StratEx - Indonesia Business Advisory we work with founders and investors to build governance, hiring strategies, and talent structures. Contact us to protect your business from the same pitfalls that toppled the so-called unicorns.