AC Ventures (ACV), an investment firm focused on early-stage start-ups in Indonesia and the rest of Southeast Asia, has reached the first closing of its fifth investment fund (the Fifth Fund). The fund has a target of $250 million and has raised 65% of that capital so far, mostly from limited partners who invested in previous ACV funds. The fifth fund has already made five investments, including SkorLifeAnd the ideal And the atma.
The last time TechCrunch covered ACV was in December 2021, when it closed third fund. (Her fourth fund focuses on Malaysia and is run by a separate team.)
Founded in 2014, ACV now has a portfolio of over 120 investments in Indonesia and the rest of Southeast Asia. Some noteworthy companies include ZendetAnd the carsumStockpet OlaAnd the charger And the Aruna. Its team has grown to 35 people, mostly in Indonesia, but ACV has also recently set up offices in Singapore and Malaysia. Half of the ACV’s leadership team is women, and that figure across its portfolio is 40%.
ACV has recently appointed Helen Wong as Managing Partner. Wong previously worked for GGV and Qiming Ventures and served on the boards of startup companies such as Tudou and Mobike.
The company is sector neutral, but many of its investments are in financial technology, logistics, e-commerce, MSMEs and consumer technology. Fund V will also focus on new topics, including climate technology. The corporate check for early-stage companies is typically $2 million, and they keep a large portion of each fund for follow-up investments.
“Overall, we are investing in the digitization of Indonesia and the Southeast Asian economy,” Adrian Lee, co-founder and managing partner of ACV, told TechCrunch. “Last year Indonesia had a digital GDP of $70 billion and it is expected to grow to more than $350 billion in the next five to six years. Through our experience in investing in previous funds, we have also developed expertise, particularly in terms of opportunities business, fintech, micro and small businesses. Each of these subject areas represent really deep pools of potential revenue and we see a lot of ways in which digital adoption can make things more efficient, less expensive and create value for all stakeholders in these sectors.”
In addition to Southeast Asia, Fund V’s LPs come from North Asia, the United States, the Middle East and Europe. Lee said global investors are drawn to Southeast Asia as it continues to show evidence of it being a mature market, with successful IPOs of unicorns like go to the And the bukkalabakLater-stage capital increase and more secondary exits.
With its focus on early stage companies, ACV is often the number one institutional investor in startups.
“Our fund plays on a winning strategy that we keep improving so we can focus on the early stage,” he told me. This means supporting companies at a point where we can be really valuable in shaping a business as we build it, and also at a point where we can be meaningful investors in a partnership with them. We typically invest in 30 to 35 companies per fund and maintain a deep follow-up ratio, 20-1, to invest in companies that deliver and create value.”
ACV’s efforts to assist the founders include several key appointments that will work closely with the startups – Lauren Blascoe as ESG President, Leighton Cosseboom as Head of Public Relations and Communications, and Alan Hellawell as Senior Advisor and Venture Partner.
The added value of the company includes working with the founders to recruit key talent and sharing the rules for operating the talent. He told me ACV likes to invest early because as teams grow, it can help startups lay the foundations for culture, retain talent and connect. It also helps companies with compliance and governance, such as making sure they have functional boards of directors and a good pool of advisors.
Another part of its value creation initiatives is the partnerships with conglomerates and business stakeholders in Indonesia that can help startups accelerate their business growth. For example, it helps fintech companies work with banks or access capital that they can use to lend.
Lee told me that ACV typically invests in 10 to 12 companies a year through its funds, and that continues though The global slowdown in venture capital investment. “In times when the money is easier, we might try to move a little faster, and at times like these, we might try to move a little slower, but basically what we’re trying to do is underwrite the right companies, and so we don’t want to rush into the timing of the market.
Although valuations across all phases have decreased by about 30% to 40%, Lee also sees improvements in the market environment, including the quality of entrepreneurs.
“The great thing about this type of period is that entrepreneurs focus more on metrics of quality and product-market fit before they start scaling their businesses,” he said. “I think in the last year when capital was easy, a number of companies that were looking for initial growth probably expanded prematurely, and that was never the most efficient use of capital. They are simply trying to gain market share and get Next round, so I think times like this are good for both entrepreneurs and investors alike.”