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 thus far, 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 lined ACV was in December 2021, when it closed its Fund III. (Its fourth fund is concentrated on Malaysia and run by a separate staff).
Based in 2014, ACV’s portfolio now has over 120 investments in Indonesia and the remainder of Southeast Asia. Some noteworthy firms embody Xendit, Carsome, Stockbit, Ula, Shipper and Aruna. Its staff has grown to 35 folks, with most primarily based in Indonesia, however ACV additionally lately established Singapore and Malaysia workplaces. Half of ACV’s management staff 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 client know-how. Fund V can even concentrate on new themes together with local weather tech. The agency’s test dimension in early-stage firms 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 advised 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, notably round commerce alternatives, fintech and micro- and small enterprises. Every of those thematic areas signify actually deep swimming pools of income potential and we’re seeing quite a lot of methods wherein 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, america, the Center East and Europe. Li mentioned world 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 firms, 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,” mentioned Li. “Meaning backing firms at some extent the place we might be actually useful within the shaping of a enterprise as they construct it, and in addition at some extent the place we might be significant buyers partnered with them. We sometimes spend money on 30 to 35 firms per fund and reserve a deep follow-up ratio, 20-1, to spend money on firms which can be executing and creating worth.”
ACV’s efforts to assist founders embody a number of key appointments who will work carefully 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 contains working with founders to rent key expertise and sharing expertise operation playbooks. Li mentioned ACV likes to speculate early as a result of as groups develop, it could actually assist startups lay down fundamentals for tradition, retaining expertise and communication. It additionally helps firms with compliance and governance, like ensuring they’ve practical 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 firms work with banks or entry capital they’ll use for lending.
Li mentioned that ACV sometimes invests in 10 to 12 firms per yr throughout its funds, and that continues regardless of the global slowdown in venture capital investing. “At instances when cash is simpler, we could attempt to transfer somewhat sooner, and at instances like this, we could attempt to transfer somewhat slower, however basically what we’re making an attempt to do is underwrite for the suitable firms, 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 surroundings, together with within the high quality of entrepreneurs.
“What’s nice about such a interval is that entrepreneurs are centered rather more on high quality metrics and product-market match earlier than beginning to scale their companies,” he mentioned. “I feel lats yr when capital was simple, most likely various firms 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 feel instances like this are good for each entrepreneurs and buyers alike.”