First-close of its fifth investment fund has been reached by venture capital firm AC Ventures (ACV), which focuses on early-stage startups in Indonesia and the rest of Southeast Asia.
The fund has so far raised 65% of its $250 million target, primarily from limited partners who contributed to ACV’s prior funds. SkorLife, IDEAL, and Atma are three of the five investments that Fund V has previously made.
ACV closed its Fund III in December 2021. Its fourth fund is managed by a different team and is geared toward Malaysia.
ACV was founded in 2014, and as of this writing, it has over 120 investments in Indonesia and other Southeast Asian countries. Companies like Xendit, Carsome, Stockbit, Ula, Shipper, and Aruna are notable examples.
35 employees now make up its team, most of whom are situated in Indonesia. ACV has also recently opened offices in Singapore and Malaysia. Women make up 40% of ACV’s executive team and 50% across its whole portfolio.
Helen Wong was recently hired by ACV as a managing partner. Wong has held board positions with firms including Tudou and Mobike in addition to his prior employment at GGV and Qiming Ventures.
Although the company doesn’t specialize in any particular industry, it invests heavily in fintech, logistics, e-commerce, MSME, and consumer technology. Fund V will emphasize fresh topics including climate technology. The company typically invests $2 million in early-stage businesses, and it sets aside a sizable portion of each fund for follow-on investments.
The LPs of Fund V also hail from North Asia, the United States, the Middle East, and Europe in addition to Southeast Asia. According to Li, Southeast Asia continues to exhibit signs of being a mature market, as evidenced by the successful IPOs of unicorns like GoTo and Bukalapak, an increase in later-stage financing, and a greater number of secondary exits. ACV frequently invests in startups as the first institutional investor due to its emphasis on early-stage enterprises.
ACV’s initiatives to support founders include several important appointments that will collaborate closely with startups. They are Alan Hellawell, senior advisor and venture partner, Leighton Cosseboom, head of PR and communications, and Lauren Blasco, head of ESG.
Working with founders to hire essential talent and sharing playbooks for talent management are two examples of the firm’s value-add. According to Li, ACV prefers to make early investments since they can benefit firms in establishing the foundations for culture, talent retention, and communication as teams expand. Additionally, it aids businesses in compliance and governance, such as ensuring that their boards are effective and that they have a solid team of advisers.
Partnerships with conglomerates and other business stakeholders in Indonesia are another facet of its value-creation strategies. These relationships can benefit startups in accelerating the expansion of their businesses. For instance, it makes it easier for fintech businesses to collaborate with banks or obtain funds for loans.
Li said that ACV typically invests in 10 to 12 companies per year across its funds, and that continues despite the global slowdown in venture capital investing.
“At times when money is easier, we may try to move a little faster, and at times like this, we may try to move a little slower, but fundamentally what we’re trying to do is underwrite for the right companies, and so we don’t want to be rushed by the timing of how the market is,” he said.
Although valuations at all levels have decreased by between 30% and 40%, Li also sees positive aspects of the market, such as improvements in the caliber of entrepreneurs.
“What’s great about this type of period is that entrepreneurs are focused much more on quality metrics and product-market fit before starting to scale their businesses,” he said.
“I think last year when the capital was easy, probably many companies chasing topline growth had scaled prematurely, and that’s never the most efficient use of capital. It’s simply trying to grab market share and get the next round, so I think times like this are good for both entrepreneurs and investors alike,” he further said.