AC Ventures (ACV), a enterprise agency centered 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 to date, 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 targeted on Malaysia and run by a separate crew.)
Based in 2014, ACV has a portfolio that now has over 120 investments in Indonesia and the remainder of Southeast Asia. Some noteworthy corporations embody Xendit, Carsome, Stockbit, Ula, Shipper and Aruna. Its crew has grown to 35 individuals, with most based mostly in Indonesia, however ACV additionally lately established workplaces in Singapore and Malaysia. Half of ACV’s management crew 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 a lot of its investments are in fintech, logistics, e-commerce, MSME and client expertise. Fund V may even deal with new themes, together with local weather tech. The agency’s examine measurement 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 instructed 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. By way of 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 lots of methods during which digital adoption can actually make issues extra environment friendly, price 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, america, the Center East and Europe. Li stated world traders 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 deal with early-stage corporations, ACV is usually the primary institutional investor in startups.
“Our fund performs on a profitable technique we’ve continued to refine to be early-stage centered,” stated Li. “Which means backing corporations at a degree the place we could be actually invaluable within the shaping of a enterprise as they construct it, and likewise at a degree the place we could be significant traders 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 are executing and creating worth.”
ACV’s efforts to assist founders embody a number of key appointments who will work carefully with startups — Lauren Blasco as head of ESG, Leighton Cosseboom as head of PR and communications, and Alan Hellawell as a senior adviser and enterprise associate.
The agency’s value-add consists of working with founders to rent key expertise and sharing expertise operation playbooks. Li stated ACV likes to speculate early as a result of as groups develop, it may well 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 a superb set of advisers.
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 stated that ACV sometimes invests in 10 to 12 corporations per yr throughout its funds, and that continues regardless of the global slowdown in venture capital investing. “At occasions when cash is simpler, we might attempt to transfer slightly sooner, and at occasions like this, we might attempt to transfer slightly slower, however essentially what we’re making an attempt to do is underwrite for the precise corporations, and so we don’t wish to be rushed by the timing of how the market is,” he stated.
Although valuations throughout all phases have fallen by about 30% to 40%, Li additionally sees upsides available in the market surroundings, together with within the high quality of entrepreneurs.
“What’s nice about any such interval is that entrepreneurs are centered far more on high quality metrics and product-market match earlier than beginning to scale their companies,” he stated. “I believe final yr when capital was straightforward, most likely quite a few corporations chasing topline progress had scaled prematurely, and that’s by no means probably the most environment friendly use of capital. It’s merely making an attempt to seize market share and get the following spherical, so I believe occasions like this are good for each entrepreneurs and traders alike.”
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