AC Ventures (ACV), a prominent venture capital firm based in Indonesia, recently achieved a significant milestone in its journey of fostering innovation and entrepreneurship. Last week, the firm announced the final close of its fifth investment fund, ACV Capital V L.P. (ACV Fund V). This fund, totaling a substantial US$210 million (approximately RM992.5 million), including co-investment funds, marks a significant leap in ACV’s efforts to nurture and grow the vibrant tech ecosystem in Southeast Asia.
The Rising Digital Economy of Indonesia
Indonesia, with its robust macroeconomic environment and burgeoning digital economy, has been a beacon of growth in the region. In 2023, the country’s digital economy was valued at an impressive US$82 billion (about RM387.5 billion). Forecasts suggest a skyrocketing growth trajectory, with expectations to reach US$360 billion by 2030. This exponential growth positions Indonesia as a crucial destination for global technology investors, keen to tap into the burgeoning market brimming with opportunities.
AC Ventures, in its announcement, highlighted that the closure of Fund V is more than just a financial milestone. It represents a pivotal moment in the firm’s journey, reinforcing its dedication to being a generational partner to visionary founders. The firm is committed to supporting high-potential ventures that drive not only economic growth but also societal impact across Southeast Asia.
A Visionary Approach to Investment
Pandu Sjahrir, a founding partner at AC Ventures, expressed his insights on Indonesia’s unique position in the global investment landscape. “Indonesia stands out as a vibrant investment hub, thriving amidst global economic shifts. Our growth is fueled by a young and growing population, rising prosperity, and a stable pro-investment government. On this trajectory, Indonesia is on course to be among the top ten largest economies in the world over the coming decade,” he stated.
This sentiment reflects the firm’s understanding of the dynamic economic environment and its potential for fostering transformative businesses and technologies.
Global Confidence in AC Ventures
The ACV Fund V has attracted substantial support from a diverse and sophisticated group of global limited partners. Remarkably, over 50% of the commitments came from returning investors, a testament to the firm’s proven track record and expertise. Additionally, over 90% of the funds are composed of institutional capital, further underscoring the trust and confidence in AC Ventures’ strategic vision.
Key investors in the fund include prestigious entities like the World Bank’s International Finance Corporation (IFC), as well as prominent financial institutions from the US, the Middle East, and North Asia. This diverse pool of investors reflects the global interest in Indonesia’s rapidly evolving digital landscape and AC Ventures’ role as a facilitator of this growth.
Euan Marshall, IFC Country Manager for Indonesia and Timor-Leste, emphasized the transformative role of technology in the region. “The dynamic growth of tech-enabled businesses has become a major catalyst for innovation. It not only generates employment opportunities for young people, but it also provides innovative solutions that enable better delivery of vital services that address pressing development challenges,” he said. “By supporting venture capital through funds like ACV Capital V, IFC can help more startups and digital entrepreneurs innovate and amplify their impact in Indonesia and beyond.”
Emphasis on Sustainable Impact
In recent years, AC Ventures has significantly increased its focus on sustainable impact. The firm prioritizes companies that deliver not only strong economic value but also contribute positively to environmental and social issues. This commitment is evident in the performance of the firm’s Fund III, which achieved an overall net impact ratio of +37%, as measured by The Upright Project in Finland. This achievement ranks the firm and its portfolio well above the Nasdaq Small Cap Index (NQUSS) average of +29%.
Early Investments and Future Prospects
ACV Fund V has already commenced deployment, announcing investments in groundbreaking ventures. Notable investments from the new fund include leading rounds in Indonesian electric vehicle manufacturer MAKA Motors and sustainable farming startup Koltiva. These investments illustrate the fund’s strategic focus on innovative and sustainable businesses that promise significant economic and societal benefits.
Adrian Li, founder and managing partner of AC Ventures, shared his vision for the fund. “With ACV Fund V, we are not just investing in companies with significant financial upside, but in a future where economic success and societal impact go hand in hand,” he said. “Our focus on financial returns and sustainability is not only a reflection of what is trending in the market. It is a fundamental cornerstone of our long-term investment philosophy to create significant value for all stakeholders.”
Value Creation and Support for Startups
AC Ventures differentiates itself by offering comprehensive value-creation services to its portfolio companies. The firm’s value creation team is instrumental in steering startups towards growth, innovation, and sustainable success. The division provides a range of services tailored to the unique needs of startups, including support in business development, strategic partnerships, talent advisory, government relations, financial planning, and fundraising.
Moreover, the team specializes in marketing, growth, PR, and ESG guidance, bolstered by a community of external expert advisors. This network comprises industry veterans, entrepreneurs, and experts from diverse fields, ranging from legal professionals to tech innovators and Fortune 500 leaders.
Michael Soerijadji, founder and managing partner, commented on the economic prospects of the region. “The Indonesian economy is on a very positive trajectory. The current market environment provides an opportunity to invest in fast-growing, operationally efficient companies with a strong focus on profitability at more attractive valuations.”
Commitment to Diversity and Inclusion
AC Ventures is a staunch advocate for diversity and inclusion. Within the firm, 50% of its senior leadership roles are filled by women. This commitment extends to its portfolio companies, where 41% of C-level leadership positions are held by women. Managing partner Helen Wong highlighted the firm’s dedication to empowering female founders and promoting gender equality within the tech ecosystem.
ACV currently manages over US$500 million in assets across five funds. The firm is an official signatory of the UN’s Women’s Empowerment Principles, IFC’s Invest2Equal program, and the UN’s Principles for Responsible Investing, underlining its commitment to sustainable, inclusive, and responsible investment practices.
In conclusion, AC Ventures’ latest fund closure marks a new chapter in its mission to drive growth and innovation in Southeast Asia. With a focus on sustainable impact, support for groundbreaking ventures, and a commitment to diversity and inclusion, AC Ventures is poised to continue its role as a key player in shaping the future of the region’s digital economy.
Featured Image courtesy of DALL-E by ChatGPT