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AC Ventures raises over US$205M for oversubscribed Fund III to invest in Indonesia’s next generation of technology leaders

Photo Credits: AC Ventures/ (Left to right) Adrian Li, Founder & Managing Partner of AC Ventures; Pandu Sjahrir, Founding Partner of AC Ventures; and Michael Soerijadji, Founder & Managing Partner of AC Ventures

Indonesia-based venture capital firm AC Ventures (“ACV”) closed its Fund III with over US$205 million in committed capital, bringing the firm’s total AUM to over US$380 million across its funds. The fund was oversubscribed and participated by renowned global and regional institutional investors, including the World Bank’s International Finance Corporation (“IFC”) and Disrupt AD, Abu Dhabi Developmental Holdings (“ADQ”) venture platform.

“Drawing on our personal experience as entrepreneurs – building businesses in emerging markets from start to acquisition and IPO – we are uniquely positioned to partner with our portfolio founders to tackle the challenges faced by rapidly scaling startups. It is reinforced by our Partners’ highly complementary backgrounds from the US, China and Indonesia and extensive investing experience in successful digital ventures, bringing valuable networks and insights our founders can capitalise on,” said Adrian Li, Founder and Managing Partner, AC Ventures.

Fund III has been investing actively since its first close in March 2020 and has completed 30 investments out of a targeted 35, anticipating over US$100M deployed by end of 2021. Several of these ventures – all invested during the pre-series A stage – have grown tremendously through the COVID-19 pandemic, helping consumers and businesses survive the disruptive period. These ventures include Shipper, Stockbit, Ula, Aruna, Bukuwarung and Colearn, which are already Centaurs with some approaching Unicorn valuations. The fund is already showing strong early traction, with MOIC at 1.94X less than two years from the first close.

“The growing base of internet users and tech-enabled services has made Indonesia home to many of South East Asia’s largest digital platforms.  Not only is this attracting more investment into the country, but it is also providing new and innovative solutions to solving today’s most pressing challenges,” said Azam Khan, IFC Country Manager for Indonesia, Malaysia and Timor-Leste. “IFC’s partnership with AC Ventures underscores our long-term commitment to Indonesia’s economic development and digital transformation. This investment aims to support the advancement of the promising and vibrant start-up ecosystem and has the potential to transform economic and social lives for all, including the most vulnerable.”

ACV’s latest fund also continues the firm’s original fund strategies of targeting early-stage Indonesia-focused technology-enabled startups. The firm employs a deeply thematic and disciplined approach towards early-stage investing coupled with a strong founder focus. It also uses a comparable market and business model analysis to build sector expertise which enables quick decision making when committing to early-stage companies – which the firm has noted to be a critical factor in securing the best deals.

“At ACV, we leverage our reach to connect our entrepreneurs to the broader ecosystem of local platforms and companies, as well as global domain experts. With decades of experience in investing and building businesses in Indonesia, we ensure that our portfolio founders are equipped with the resources and networks they require to build billion-dollar businesses. We’re grateful to be in a position to help catalyse change for Indonesia’s rapidly growing digital ecosystem,” Michael Soerijadji, Founder and Managing Partner, AC Ventures.

In line with ACV’s mission to empower entrepreneurs with experience, network and capital, the larger fund will enable the firm to further invest into providing deep tactical support to Founders through its Value Creation Team. This team – comprising functional experts with deep industry experience – will work across the firm’s portfolio to support Talent Operations, Business Development and Regulatory, Growth and Capital Formation.

With a population of more than 274 million people – over 70 per cent of which are internet users– Indonesia is Southeast Asia’s largest internet economy, continuing to grow with an estimated US$70 billion in gross merchandising value (GMV) in 2021, which is set to double to US$146 billion by 2025. The COVID-19 pandemic accelerated digital consumption, drawing new internet users while increasing frequency across consumers. Additionally, Micro, Small, and Medium Enterprises (MSMEs) – a sector historically slow in embracing the digital segment of the Indonesian economy – saw significant adoption uptake as digital and technology-enabled solutions were relied on to cut business costs, improve sales and increase productivity.

“Indonesia presents a massive, ever-growing internet economy opportunity and the pandemic boosted this further by significantly accelerating digital adoption and consumption nationwide across different consumer and business segments. Not only is the resilience of Indonesia’s economy in the face of this adversity gives internet sectors a massive opportunity to rebound, but the exit landscape is also heating up, as we will see notable public exits in the coming future from regional tech giants,” said Pandu Sjahrir, Founding Partner, AC Ventures.

Photo Credits: AC Ventures/ (Left to right) Pandu Sjahrir, Founding Partner of AC Ventures; Adrian Li, Founder & Managing Partner of AC Ventures; Michael Soerijadji, Founder & Managing Partner of AC Ventures

ACV was formed in 2019 as a merger between two leading venture capital funds in Indonesia – Agaeti Venture Capital and Convergence Ventures. The firm works closely with entrepreneurs and complements them with research-driven knowledge, action-orientated portfolio support, capital value creation team, business development, network and resources.

ACV’s Partners have been investing in the early-stage Indonesian technology ecosystem since 2014 and have a portfolio of over 100 companies across its funds, making it one of the largest Indonesia-focused early-stage venture capital firms. Among its early investments, two companies, Xendit and Carsome, have already emerged as Unicorns. In the past 18 months – as digital adoption has accelerated due to the pandemic – growth in ACV’s portfolio rapidly increased, resulting in over US$500M in follow on funding raised in the newest portfolio alone from well-known global investors such as Sequoia, Tiger Global and Prosus, which also subsequently helps to generate greater economic impact for Indonesia.

“ACV’s deep local insights, network, and resources have greatly supported our business operations and growth. In particular, their Partners’ entrepreneurial backgrounds and Founder focused philosophy have made them a highly valued local investor in our firm.” Nipun Mehra, Founder, CEO, Ula.

“As our only Indonesian Venture Firm investor, we found ACV’s unique local insights, operational resources and relationships hugely valuable. They’ve supported us in key customer introductions, partnerships, and tactical advice for scaling our business in Indonesia.” Phil Opamuratawongse, CEO, Shipper.

“The ACV team was an early believer in our firm and always helpful in our journey, especially with their deep sectoral experience in Indonesia fintech and relevant network in the industry.” Sigit Kouwagam, CEO, Stockbit, Bibit.

“ACV has been deeply involved in our value creation process, from connecting us with potential business partners to bringing our first global investor into the captable. On top of that, their constructive feedback and strategic advice have brought tremendous value to our company’s growth and development since the very beginning.” Farid Naufal Aslam, CoFounder & CEO, Aruna.

ACV’s earlier funds continue to perform well at top-quartile returns, with the 2015 vintage delivering a Multiple on Invested Capital (MOIC) of 2.99X and the 2018 vintage fund at 2.41X.

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