Global investing firm Capria Ventures announces a partnership with Indonesian venture capital firm AC Ventures to advance the Indonesian startup ecosystem by investing in the next generation of technology entrepreneurs. AC Ventures manages a total AUM of US$300M and plans to complete the final close of a US$120M target fund by this year.
The partnership is in line with Capria’s commitment to invest and impact the lives of millions across the Global South including Southeast Asia, India, Latin America, and Africa.
Jakarta-based AC Ventures is an early-stage venture capital firm that invests in technology-enabled solutions addressing billion-dollar market opportunities in Indonesia. Several of its Fund III portfolio companies such as Shipper, Stockbit, Aruna, and Eden Farm have grown exponentially in the past 18 months, becoming category leaders in their respective markets.
“AC Ventures and Capria share a similar approach as hands-on, value-adding investors bringing hi-octane capital that support founders with collective experience, network, and resources. Capria’s global experience in startups from the 14 partnerships brings an edge to identifying and understanding emerging market ventures. AC Ventures’ proven leadership in sourcing local startups at an early stage along with their track record of supporting founders reinforced our investment decision,” said Dave Richards, Co-Founder & Managing Partner Capria Ventures.
He added, “Capria will also look to co-invest directly in the portfolio companies, alongside AC Ventures, in breakthrough solutions with global potential.”
Commenting on the partnership, Adrian Li, Founding and Managing Partner, AC Ventures said, “Capria brings together a trusted peer group of fund managers from the Global South where market dynamics are almost similar. We’ve seen that this exchange of knowledge, ideas, and experiences can be leveraged to build a strong and globally competitive portfolio.”
Building the next-gen leading seed fund in Indonesia
AC Ventures was formed in 2019 as a merger between Convergence Ventures and Agaeti Capital Ventures, each of which managed an Indonesia-focused early-stage venture fund. Combined, the firms have invested in more than 100 startup companies since 2014. Their two previous funds have been performing well, including several early exits
Several drivers have contributed to Indonesia’s rapidly rising status as a compelling investment destination. The massive young population, the emerging middle class, the fast-growing internet economy, and the stable economic and political landscape have helped produce South East Asia’s largest technology companies such as Gojek, Tokopedia, and Traveloka.
Situated at the heart of Southeast Asia, the country is the world’s fourth most populous country, with millions joining the middle class each year, and consumer expenditure forecast to continue growing at double digits.
Other key factors are maturing infrastructure supporting digital adoption, decreasing costs of hardware (smartphones/ notebooks), improved payment rails, vastly improved logistics delivery infrastructure, and greater availability of talent amongst others. Ever-increasing access to capital is also one of the biggest drivers of growth. With global pools of capital chasing late-stage deals, to successful public market listings of Indonesian unicorns, a predictable exit ecosystem has also been established.
Resilience and returns
Over 95% of AC Ventures’s portfolio benefited from changes in consumption patterns resulting from the pandemic. AC Ventures latest fund has already seen over 25 follow-on financing rounds into its portfolio companies since its 2020 first close delivering over 2.5X gross return on invested capital in unrealized gains. Several of ACV’s portfolios such as Shipper, Stockbit, Bukuwarung, and Aruna have attracted globally renowned growth investors including DST, Sequoia, Valar, and B Capital.
Outlook for Indonesia
With an average growth rate of 49% per year since 2015, Indonesia’s internet economy is thriving. This growth pace has exceeded all expectations and has positioned Indonesia as the largest and fastest-growing internet economy in Southeast Asia, well on track to cross $130B by 2025.
The outbreak of COVID-19 triggered a new era of growth for the digital economy, as consumers got a major push to move online and adopt e-commerce and other digital solutions.
Indonesia is home to six unicorns including ride-hailing giant Gojek, online travel agent Traveloka, digital payments firm OVO and GoPay, and online marketplaces Tokopedia and Bukalapak. It also has the biggest stock exchange in SE Asia, so liquidity is not an issue.