Jakarta –
The rise of layoffs (layoffs) at start-up companies in the technology sector or startups are becoming a hot topic of conversation in the country. This is often associated with the bubble burst phenomenon.
Bubble burst or bubble situation in general is a condition that occurs when the market value rises very quickly, especially in asset values and is followed by a rapid decline. Then, is it really happening?
Director of the Center of Economic and Law Studies (Celios) Bima Yudhistira explained that the current condition is still a debate and it is still too early to call it a bubble. This is because the current conditions are much different from the previous bubble conditions such as the dotcom bubble.
“But what is clear is that there are some startups whose main problem is funding. The products can be matching but in terms of funding, there have been some changes,” he said at the d’Mentor event detik.com as written, Friday (3/6/2022).
Funding is at the root of the problem. Bhima explained, before the pandemic interest rates were very low. Some countries even apply negative interest rates.
Conditions at that time, liquidity was abundant. Meanwhile, traditional assets are less attractive for investment.
“Gold is not attractive, many debt securities with low interest end up investing in these start-up companies or startups,” he continued.
According to Bhima, amid the investment euphoria, there is usually a correction. He also said, the natural selection process was then underway.
“So startups whose products don’t fit in the market, then have problems with funding, they make efficiency, it’s to reorganize competition. Especially those who previously might burn money, burn money to get customers in a short time, market shareit increases in a short time, maybe it is demanded that the growth is more organic,” he explained.
Meanwhile, the Chairperson of the Indonesian e-Commerce Association for the 2018-2020 period, Ignatius Untung, assessed that the cause layoffs What happens in a number of startups is the global economic condition.
“We anticipate global economic conditions that people are starting to say it’s a recession, yes. Indonesia may not have entered, maybe we are just at the door, but we have seen countries that have already been hit by Turkey whose inflation has reached double digits, America also noted With record high inflation, China has started to get ready,” he explained.
“But if it’s related to what was said to be the tech bubble and so on, I don’t see it, I’m not not saying yes, I’m not saying that it’s not the cause, but at least it’s not the main cause. pure just because of the recession. Unfortunately, the startup business model is prone to recession,” he continued.
(acd/eds)
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