The IT Services Industry in Indonesia
by Protemus Capital
The M&A landscape in Indonesia's IT services industry reflects a dynamic environment influenced by both macroeconomic factors and sector-specific growth trends.
While Indonesia's healthy GDP growth and rising consumer confidence have fueled M&A potential in recent years, the industry experienced a slowdown in deal-making momentum during 2022 and 2023. This deceleration can be attributed to macro headwinds and financial volatility stemming from the lingering effects of the pandemic, as companies prioritize financial recovery and stability.
Despite the temporary slowdown in deal activity, the IT services industry in Indonesia has exhibited robust growth, with a market value increasing from $2.47bn in 2018 to $4.89bn in 2023, representing a compound annual growth rate (CAGR) of 10.2%. This growth trajectory is expected to continue, with a forecasted CAGR of 9.96% from FY24F - FY28F, highlighting the sector's resilience and long-term potential.
The consistently expanding industry size underscores the attractiveness of the Indonesian IT services market for investors and stakeholders looking to capitalize on the country's digital transformation journey and technological advancements.
GCG member firm
Protemus CapitalJakarta, Indonesia
Wiljadi TanContact Wiljadi
The IT industry in Indonesia is currently witnessing notable trends across multiple sectors.
IT consulting services are in high demand as businesses seek expertise in digital transformation and cybersecurity. Application software development is thriving, driven by the need for customized solutions and improved operational efficiency.
Internet services, including broadband expansion and e-commerce platforms, are experiencing rapid growth, reflecting the country's increasing digital connectivity. Infrastructure development is a key focus area to support digital initiatives and ensure robust cybersecurity measures.
These trends collectively highlight Indonesia's dynamic IT landscape and the opportunities it presents for innovation and investment.
A platform Data Center company (Digital Edge) that is based in HongKong becomes the majority shareholder of PT Indointernet Tbk., a provider of digital infrastructure services by acquiring 189.90 million of its shares.The deal was closed in 2021 with a transaction value of $165m. (2021)
Data On a provider of HR and ERP Solutions that is headquartered in Indonesia merged with Huminca, a business solution provider that is based in Thailand. The deal was closed in 2022 in Indonesia with a total transaction value of USD $66.85m. (2022)
Selected transaction by Protemus Capital
Two years following Protemus Capital's initial advisory to PT Alita Praya Mitra (Alita) on its Fiber Optic assets' divestiture, the firm stepped in again to advise on the second phase in early 2024. This next step saw Alita successfully sell a total of around 12,056 km billable fiber optic infrastructure to leading Indonesian telecommunications companies.
With its 28-year legacy in the ICT sector, Alita solidified its stature as a top-tier provider of network, service, and smart solutions, leveraging this strategic sale to further its industry leadership.
