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Global Uncertainty Threatens Indonesian Unicorns; Mergers And Acquisitions Emerge As A Rational Option

The wave of global economic uncertainty and persistently high interest rates, particularly in the United States, continues to exert pressure on the startup industry, including the unicorns in the country. This situation compels investors to be more selective in their capital allocation, prompting startups to seek solutions through operational efficiency, notably via mergers and acquisitions (M&A).  

Izzudin Al Farras Adha, a researcher at the Institute for Development of Economics and Finance (Indef), stated that M&A options are becoming increasingly relevant amid the current economic challenges. He noted that startup investors are finding it difficult to achieve profitability, which may adversely affect funding for startups that are already struggling. 'Startup investors are increasingly challenged to meet their financial targets,' Izzudin remarked to Bisnis on Saturday, April 26, 2025. Furthermore, Izzudin elaborated that operational efficiency is crucial for the sustainability of startups.  

Following the wave of mass layoffs in recent years, M&A options have gained traction as a strategy to achieve more significant efficiency. He also emphasized that large-scale digital companies currently require better economies of scale to reach broader markets with higher efficiency levels. This further enhances the appeal of M&A schemes as a strategic move. 'The option of mergers and acquisitions is also strengthening because large digital companies need better economies of scale to access larger markets with higher efficiency,' he explained. Izzudin also predicts that the wave of layoffs in startups will continue alongside a more dominant trend of M&A activity this year. 'Mergers and acquisitions are more likely to occur this year, followed by layoffs from the parent company affecting employees of the acquired or smaller companies,' Izzudin concluded. 

Tag: Indef Indonesian Unicorns Izzudin Al Farras Adha