Indonesian artificial intelligence (AI) startups are increasingly catching the eye of investors, with East Ventures being one of the most active venture capital firms backing this sector, specifically outlining the criteria it looks for when funding AI-driven ventures in the country.

According to Roderick Purwana, Managing Partner at East Ventures, the firm remains sector-agnostic but is currently focusing on four key areas in 2025: AI, healthtech, consumer, and climate. Among these, AI presents unique challenges, including a shortage of skilled talent, high development costs, and intense global competition from tech giants like Google, OpenAI, and Meta, which offer multi-billion rupiah compensation packages to AI experts.

“Fundamentally, we invest in people and potential markets. In AI, most Indonesian startups are still focused on application-level solutions rather than building their own foundational models,” Roderick said during the East Ventures Open Book event in Jakarta on Friday, July 25, 2025. “That’s why we look closely at the founders − their vision, background, and ability to address real-world problems.”

Melisa Irene, a Partner at East Ventures, elaborated that AI application startups typically leverage existing AI tools to offer tailored solutions. For example, Nexmedis, an AI-powered hospital management system (HMS), aims to simplify healthcare facility operations so medical professionals can focus more on patient care.

Melisa added that, given the rapid evolution of AI − from generative AI like ChatGPT to emerging AI agents and future physical AI such as robots − East Ventures also evaluates how founders adapt and innovate.

“Whether through agent-based AI or humanoid robotics, we want to see how founders approach problem-solving efficiently,” she said. “Speed and cost in AI may change, but the founder’s mindset and execution remain central.”

The firm also considers the integrity of founders, their market foresight, and their ability to translate AI into real-world, scalable solutions.

Indonesia's AI startup sector is gaining momentum. According to Katadata Insight Center, AI-related investment in Indonesia reached US$542.9 million (Rp8.9 trillion) as of 2024, a 141.5 percent increase over the past five years.

In the first quarter (Q1) of 2024, Nvidia announced a US$200 million investment in partnership with Indosat Ooredoo Hutchison to develop an AI center and talent hub in Surakarta, Central Java. Indosat and GoTo Gojek Tokopedia are also collaborating on a local-language large language model (LLM) named Sahabat-AI.

Other notable AI startups include Algobash, which uses IBM watsonx to assess IT skills and match talent, and East Ventures-backed Sxored and Nexmedis, both applying AI to solve real-world problems in healthcare and other sectors.