AC Ventures (ACV), a enterprise agency targeted on early-stage startups in Indonesia and the remainder of Southeast Asia, has reached the primary shut of its fifth funding fund (Fund V). The fund is focusing on $250 million and has raised 65% of that capital up to now, principally from restricted companions who invested in ACV’s earlier funds. Fund V has already made 5 investments, together with SkorLife, IDEAL and Atma.
The final time TechCrunch coated ACV was in December 2021, when it closed its Fund III. (Its fourth fund is concentrated on Malaysia and run by a separate group).
Based in 2014, ACV’s portfolio now has over 120 investments in Indonesia and the remainder of Southeast Asia. Some noteworthy corporations embrace Xendit, Carsome, Stockbit, Ula, Shipper and Aruna. Its group has grown to 35 individuals, with most primarily based in Indonesia, however ACV additionally lately established Singapore and Malaysia workplaces. Half of ACV’s management group are girls and throughout its portfolio that determine is 40%.
ACV lately employed Helen Wong as managing associate. Wong beforehand labored at GGV and Qiming Ventures and has served on the boards of startups like Tudou and Mobike.
The agency is sector-agnostic, however lots of its investments are in fintech, logistics, e-commerce, MSME and shopper expertise. Fund V will even concentrate on new themes together with local weather tech. The agency’s examine dimension in early-stage corporations is often $2 million, and it reserves a big a part of every fund for follow-on investments.
“Broadly talking, we’re investing within the digitization of Indonesia and the Southeast Asia economic system,” ACV co-founder and managing associate Adrian Li informed TechCrunch. “Final yr, Indonesia’s digital GDP was $70 billion and that’s anticipated to develop to over $350 billion within the subsequent 5 to 6 years. Via our expertise of investing over previous funds, we’ve additionally developed experience, significantly round commerce alternatives, fintech and micro- and small enterprises. Every of those thematic areas characterize actually deep swimming pools of income potential and we’re seeing plenty of methods during which digital adoption can really make issues extra environment friendly, value much less and create worth for all of the stakeholders in these verticals.”
Along with Southeast Asia, Fund V’s LPs come from North Asia, the USA, the Center East and Europe. Li mentioned international buyers are drawn to Southeast Asia because it continues to point out proof of being a maturing market, with the profitable IPOs of unicorns like GoTo and Bukalapak, a rise in later-stage capital and extra secondary exits.
With its concentrate on early-stage corporations, ACV is commonly the primary institutional investor in startups.
“Our fund performs on a profitable technique we’ve continued to refine to be early-stage targeted,” mentioned Li. “Which means backing corporations at some extent the place we may be actually beneficial within the shaping of a enterprise as they construct it, and in addition at some extent the place we may be significant buyers partnered with them. We sometimes put money into 30 to 35 corporations per fund and reserve a deep follow-up ratio, 20-1, to put money into corporations which might be executing and creating worth.”
ACV’s efforts to assist founders embrace a number of key appointments who will work intently with startups. They’re Lauren Blasco as head of ESG, Leighton Cosseboom as head of PR and communications, and Alan Hellawell as a senior advisor and enterprise associate.
The agency’s value-add consists of working with founders to rent key expertise and sharing expertise operation playbooks. Li mentioned ACV likes to take a position early as a result of as groups develop, it will probably assist startups lay down fundamentals for tradition, retaining expertise and communication. It additionally helps corporations with compliance and governance, like ensuring they’ve useful boards and set of advisors.
One other a part of its value-creation initiatives are partnerships with conglomerates and enterprise stakeholders in Indonesia that may assist startups speed up the expansion of their enterprise. For instance, it helps fintech corporations work with banks or entry capital they’ll use for lending.
Li mentioned that ACV sometimes invests in 10 to 12 corporations per yr throughout its funds, and that continues regardless of the international slowdown in enterprise capital investing. “At occasions when cash is less complicated, we might attempt to transfer a bit of sooner, and at occasions like this, we might attempt to transfer a bit of slower, however essentially what we’re attempting to do is underwrite for the suitable corporations, and so we don’t wish to be rushed by the timing of how the market is,” he mentioned.
Although valuations throughout all phases have fallen by about 30% to 40%, Li additionally sees upsides available in the market setting, together with within the high quality of entrepreneurs.
“What’s nice about the sort of interval is that entrepreneurs are targeted far more on high quality metrics and product-market match earlier than beginning to scale their companies,” he mentioned. “I believe lats yr when capital was simple, in all probability various corporations chasing topline development had scaled prematurely, and that’s by no means probably the most environment friendly use of capital. It’s merely attempting to seize market share and get the subsequent spherical, so I believe occasions like this are good for each entrepreneurs and buyers alike.”