Experts and industry insiders say Indonesia’s venture capital firms will be more risk-averse after former executives of two government-backed investment firms were sentenced to jail for their decision to invest in a now-defunct agritech pioneer.

Despite their initial promise, many of the country’s major tech firms are struggling to create value for shareholders.

Experts and industry insiders say Indonesia’s venture capital firms will be more risk-averse after former executives of two government-backed investment firms were sentenced to…