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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 concentrating on $250 million and has raised 65% of that capital to this point, 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 Thealike lined 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 corporations embody Xendit, Carsome, Stockbit, Ula, Shipper and Aruna. Its workforce has grown to 35 folks, with most primarily based in Indonesia, however ACV additionally not too long ago established Singapore and Malaysia workplaces. Half of ACV’s management workforce are girls and throughout its portfolio that determine is 40%.

ACV not too long ago 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 shopper know-how. Fund V may even give attention to new themes together with local weather tech. The agency’s examine measurement in early-stage corporations 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 associate Adrian Li instructed Thealike. “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 means 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 signify actually deep swimming pools of income potential and we’re seeing a number of methods by which digital adoption can actually 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 US, the Center East and Europe. Li stated world buyers are drawn to Southeast Asia because it continues to indicate 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.

ACV managing companions Michael Soerijadji, Helen Wong, Adrian Li and Pandu Sjahrir Picture Credit: ACV

With its give attention to 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 centered,” stated Li. “Meaning backing corporations at some extent the place we might be actually invaluable 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 usually spend money on 30 to 35 corporations per fund and reserve a deep follow-up ratio, 20-1, to spend money on corporations which can be executing and creating worth.”

ACV’s efforts to assist founders embody 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 contains working with founders to rent key expertise and sharing expertise operation playbooks. Li stated ACV likes to take a position early as a result of as groups develop, it could assist startups lay down fundamentals for tradition, retaining expertise and communication. It additionally helps corporations with compliance and governance, like ensuring they’ve purposeful 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 stated that ACV usually invests in 10 to 12 corporations per yr throughout its funds, and that continues regardless of the worldwide slowdown in enterprise capital investing. “At instances when cash is simpler, we might attempt to transfer slightly sooner, and at instances like this, we might attempt to transfer slightly slower, however basically what we’re making an attempt to do is underwrite for the best corporations, and so we don’t need to be rushed by the timing of how the market is,” he stated.

Although valuations throughout all levels 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 centered rather more on high quality metrics and product-market match earlier than beginning to scale their companies,” he stated. “I believe lats yr when capital was simple, most likely quite a few corporations chasing topline progress had scaled prematurely, and that’s by no means essentially the most environment friendly use of capital. It’s merely making an attempt to seize market share and get the subsequent spherical, so I believe instances like this are good for each entrepreneurs and buyers alike.”

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