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GLOBALOUTLOOK RISINGECOSYSTEMS


BALI


Bali’s placein paradise for entrepreneurs


ACCESS TO FUNDING AND SCALE-UP AMBITIONS ARE STILL A HURDLE FOR POTENTIAL INVESTORS. YESSI BELLO PEREZ REPORTS


its the emerging start-up ecosystem and lowoverhead costs that are pull- ing in swathes of entrepreneurs. The Indonesian island is home


B


to a growing number of coworking spaces and regular events that focus on entrepreneurship, tech, and innovation. Perhaps unsurpris- ingly, Bali hosts one of the world’s largest remote work conferences, Running Remote. “Bali is an incredibly exciting


place to be.Wehave a plethora of coworking spaces, events, access to super talented and experienced peo- ple, and social and business net- works,” says Lavinia Iosub, the man- aging partner of Liv.It, a hub for dis- ruptive businesses building sustaina- ble remote work structures.


Entrepreneurial fabric Bali’s entrepreneurial layers are dis- tinctlymade up of two cohorts: native entrepreneurs, who are some- what limited by the constraints of the localmarket, and expatriates, who can plug into knowledge and funding overseas. The island’seconomy reliesmostly


on tourism and agriculture, and it is unsurprising that these industries are heavily interwovenwiththe island’s


THERE’S STILLATRUST ISSUEWHENITCOMES TO INVESTORS BACKING NON-HOSPITALITY BUSINESSES IN BALI


18


ali’s idyllic beaches and breath- taking scenerymay be enough to entice holidaymakers, but


entrepreneurial fabric. “Transportation, hospitality,


agriculture, education, food and wastemanagement are the most commonthings you hear at every start-up pitching event,” says Vitto Christaldi, a projectmanager at the Coworking Indonesia Association. “The reasonwhymost start-ups


are focused on these sectors is because these are the main challenges thatwe have on the island,” he adds. Indonesia has a well-documented


problemwith plastic and waste man- agement. This also helps to explain Bali’s heavy focus on green initia- tives, ranging fromcampaigns such as ‘Bye Bye Plastic Bags’, all the way through to companies including Avani Eco,which produces sustaina- ble packaging and hospitality prod- ucts made fromrenewable and fully compostable natural ingredients. Thanks to the remote working


opportunity, dropshipping is also gaining momentumamong Bali’s expats, particularly in Canggu, a resort village on the island’s south coast. Dropshipping is a fulfilment method which entails sourcing prod- ucts, typically via the Chinese e-com- merce platformAliExpress, and sell- ing themto European or American consumers at a profit.


Livingandworking in Bali Expats are further swayed by Bali’s affordable living standards. A homes- tay, a private studio apartment with a shared kitchen and pool, can cost as little as $300 a month. Thanks to improvements and the


introduction of 4G and fibre optics in recent years, connectivity and par- adise are notmutually exclusive. Wi-Fi is readily available in hotels and cafes, and although connectivity varies by location, it is usually better


in the south and central part of the island, says Mr Christaldi, adding thatmany internet providers in Bali are nowoffering speeds of up to 100Mbps. Despite the obvious advantages,


entering the Indonesian market is not always cheap, especially for expats. “There are legal require- ments for registering a foreign- owned business or building a startup. For example, the minimum capital investment is Rp10bn ($700,000), with 25% of that needing to be paid upon company registra- tion,” Ms Iosub explains. Those seeking to work in Bali


must also take into account visa and permit requirements.


Small fish in a bigpond It would be a mistake to look at Indonesia’s start-up ecosystem as a whole, as there are clear differ- ences between itsmany islands and provinces. Developed hubs such as Jakarta—


home to various unicorns including ride-hailing service Gojek, travel tech business Traveloka and e-commerce giant Tokopedia—benefit from the support of large corporations and the existence of a healthy funding envi- ronment, and attract the bulk of the country’s venture capital investment. In stark contrast, Bali’s entrepre-


neurs are being held back by a lack of funds. “There’s still a trust issuewhen it


comes to investors backing non-hos- pitality businesses in Bali,” explains Mr Christaldi. “There’s still a stigma. People


think that because Bali is where you come to relax, entrepreneurs don’t work as hard as those living in big cities,” he says. For decades, presenteeism has


www.fDiIntelligence.com December 2020/January 2021


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