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, largely 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 workforce).
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 workforce has grown to 35 individuals, with most primarily based in Indonesia, however ACV additionally lately established Singapore and Malaysia places of work. Half of ACV’s management workforce are ladies and throughout its portfolio that determine is 40%.
ACV lately employed Helen Wong as managing companion. 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 know-how. Fund V will even deal with new themes together with local weather tech. The agency’s test dimension in early-stage firms is usually $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 companion Adrian Li informed TechCrunch. “Final 12 months, Indonesia’s digital GDP was $70 billion and that is anticipated to develop to over $350 billion within the subsequent 5 to 6 years. By means of our expertise of investing over previous funds, we have 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 a whole lot 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 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 deal with early-stage firms, ACV is usually the primary institutional investor in startups.
“Our fund performs on a profitable technique we have continued to refine to be early-stage centered,” mentioned Li. “Meaning backing firms at a degree the place we will be actually worthwhile in shaping a enterprise as they construct it, and likewise at a degree the place we will be significant buyers partnered with them. We sometimes put money into 30 to 35 firms per fund and reserve a deep follow-up ratio, 20-1, to put money into firms which might 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 companion.
The agency’s value-add contains 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 may possibly assist startups lay down fundamentals for tradition, retaining expertise and communication. It additionally helps firms with compliance and governance, like ensuring they’ve useful boards and an excellent 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 will use for lending.
Li mentioned that ACV sometimes invests in 10 to 12 firms per 12 months throughout its funds, and that continues regardless of the worldwide slowdown in enterprise capital investing. “At instances when cash is less complicated, we might attempt to transfer slightly sooner, and at instances like this, we might attempt to transfer slightly slower, however basically what we’re attempting to do is underwrite for the suitable firms, and so we do not need 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 out there setting, 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 mentioned. “I believe lats 12 months when capital was simple, most likely various firms chasing topline development had scaled prematurely, and that is by no means probably the most environment friendly use of capital. It is merely attempting to seize market share and get the subsequent spherical, so I believe instances like this are good for each entrepreneurs and buyers alike.”