More investor money It’s flowing into the Indonesian startup ecosystem. today, AC VenturesFocusing on early-stage start-ups in the country, it announced that it has raised $ 205 million in commitment capital for its oversubscribed fund II. That’s more than double the initial goal of $ 80 million. Investors include the World Bank’s International Finance Corporation (IFC) and Abu Dhabi Development Holdings’ venture development platform, Disrupt AD. This brings the company’s total assets under management to approximately $ 380 million.
AC Venture Fund III has been actively investing since its first settlement in March 2020 and has now completed 30 of its 35 eligible investments, with plans to roll out more than $ 100 million by the end of 2021. It states that. Stage startup before Series A. According to the company, many portfolio companies gained momentum during the COVID-19 pandemic, with Shipper, Stockbit, Ula, Arna, Bukwarn, Koran and others reaching a “centaur” status, or at least $ 100 million. It is said that it was done. AC Ventures also states that Fund III offers strong early returns with a MOIC (multiple of investment capital) of 1.94 times within two years of its initial closure.
TechCrunch in October 2020 Covers the first close of Fund IIIThe goal was $ 80 million. That number has grown to over $ 200 million in the end. The typical check size for Fund III varies greatly. Founder and Managing Partner Adrian Lee told TechCrunch that the larger the fund, the more flexibility AC Ventures has to deploy the right amount of capital based on the start-up stage, so co-investors and co-investors He said he didn’t have to worry about other funding. Of capital. This means that the initial check size for Fund III can range from hundreds of thousands to millions of dollars, depending on traction and sector.
“I think the startups started up faster due to the increased portfolio traction during the COVID period and the growing global interest in Asian companies,” Li said. “Large funds allow us to maintain proportional distribution and ensure that we can maintain the highest corporate ownership.”
At the beginning of 2021, it became clear that tech companies were more dependent than ever on helping people continue their daily lives, including shopping, paying, and even entertainment. It was immediately reflected in the public market. ” “I think the turning point was probably August or September last year. Since then, institutional investors and LPs have begun to realize that COVID will not go away in the short term, so they’re hiring. At that moment, the frequency of new users and new users by existing users was very high, and Indonesia stood out. ”We started looking for companies.
AC Ventures includes the unicorns Xendit and Carsome, with the previous two funds returning 2.99X and 2.41X gross MOICs. The company’s portfolio companies have also raised a total of more than $ 500 million in additional funding from investors such as Sequoia, Tiger Global and Prosus.
The company began investing as Convergence Ventures in 2014 and became AC Ventures in 2019 through a merger with Agaeti Venture Capital. Currently, with a total of more than 100 portfolio companies, AC Ventures states that it is one of the largest early stage venture capital firms focused on Indonesia.
Many of AC Ventures’ partners, including Li, are former entrepreneurs who have worked in markets such as the United States, China and Indonesia. As a result, they are in a unique position to work closely with startups from early to late, he says. For example, AC Ventures helps portfolio companies recruit key talent, introduces appropriate business partnerships to scale, and assists in downstream financing. Having a larger fund gives AC Ventures the ability to invest in what is called a value creation team, or a group of experts in areas such as data operations and growth and scaling.
“Building a specific team whose sole purpose is to increase the value of the portfolio company through advice and interaction is really exciting for us. When the fund is small, we build an investment team to support the portfolio company. It’s hard to do, but now that the fund is big, you can invest in it, “says Li.
Since AC Ventures works with very early stage startups, we have developed a concrete strategy for making investment decisions. For example, use comparable market and business model analysis to make decisions and understand new sectors.
According to Lee, AC Ventures is investing in companies with good teams and strong ideas, or those that have paved the way for customers and revenue. “There are no strict rules, but what we want to do is get into the company as soon as possible, where we can build beliefs around the team and the market and become their longtime partners as we grow up. increase. “
In the early stages, he added, “there isn’t much data we can undertake.” “Fortunately, investing in Indonesia gives us wisdom about models that work around the world and the advantage of being able to analyze where a particular market is in Indonesia compared to the country as a whole and the country’s economic development. You can do research on many markets and business models in advance, such as whether this model looks correct, whether it has great potential, and a business model that works well in markets such as China and Indonesia. You can check if it is. “
AC Ventures also conducted a quantitative and qualitative analysis of the most successful portfolio companies and refined a set of signals to identify the most likely founding teams. Li said this would give the company a more objective way to rank early-stage startups.
For example, it is important that at least one of the founders (usually the CEO) has a strong ability to convey a vision to the relevant stakeholders, members, or first-time users or business partnerships. When AC Ventures asks the founders about their business, they also need to be able to go into details, including all of them, what works and what doesn’t. “All of these demons are in the very necessary details to run a business, so we know which experiments to perform and how to repeat the product. Things to incorporate in the early stages of the business. There are many, but I think it’s important that the founding team is really on top of it. “
In a statement on IFC’s investment in AC Ventures Fund III, Azam Khan, IFC Country Manager for Indonesia, Malaysia and East Timor, said, “The partnership between IFC and AC Ventures is a long-term commitment to Indonesia’s economic development and digital transformation. We are emphasizing our efforts. “
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