AC Ventures’ Recent Achievement
In the face of a prolonged period of limited funding, AC Ventures, a prominent venture firm based in Jakarta, Indonesia, has brought a wave of optimism to startups in Southeast Asia. The firm has successfully completed the final close of its fifth fund, ACV Fund V, raising a substantial $210 million. This achievement stands out as a beacon of hope in challenging times for venture capital and technology businesses, particularly in the context of the ongoing funding slowdown.
Key Contributors and the Composition of ACV Fund V
AC Ventures’ new fund saw significant contributions from a diverse group of limited partners, including the World Bank’s International Finance Corporation (IFC) and investors from the United States, the Middle East, and North Asia. Remarkably, more than half of the fund’s capital came from returning LPs, underscoring the trust and confidence in AC Ventures’ strategy. Institutional capital forms over 90% of the total fund, indicating strong support from established financial entities.
Investment Focus and Strategy
With a focus on fostering growth and innovation, AC Ventures has begun deploying capital from Fund V into promising startups. Examples include MAKA Motors, an Indonesian electric vehicle manufacturer, and Koltiva, a sustainable farming startup. These investments reflect the firm’s commitment to supporting ventures that are not only commercially viable but also socially and environmentally responsible.
Growth and Portfolio Expansion
AC Ventures has witnessed substantial growth, now managing over $500 million across its five funds. Fund V aims to add approximately 25 new companies to the existing portfolio of 120 startups, with typical investments ranging between $2 million and $5 million. However, in certain scenarios, particularly for rapidly growing startups aligning with AC Ventures’ impact goals, the investment can surge to $20-$30 million.
Fundraising Experience and Outlook
Raising Fund V was no small feat, especially during a period marked by a funding slowdown. Adrian Li, co-founder and managing partner of AC Ventures, described 2023 as one of the toughest years for fundraising in the past decade. Despite these challenges, the firm managed to attract new and returning limited partners who share a strong belief in the potential of Indonesia and Southeast Asia.
Economic Context and Investment Opportunities in Indonesia
Indonesia, constituting 40% of Southeast Asia’s economy, remains a focal point of AC Ventures’ investment strategy. With Jakarta’s economy projected to reach $360 billion by 2030 and favorable pro-investment policies in place, the country presents a lucrative landscape for digital economy ventures. AC Ventures’ co-founder and managing partner, Michael Soerijadji, highlights private consumption, manufacturing, services, and exports as key drivers of Indonesia’s economic growth.
Sectoral Focus and Digital Adoption
AC Ventures expresses a keen interest in sectors like fintech, e-commerce, health tech, MSME enablement, and climate. The firm is also enthusiastic about startups that cater to evolving consumer needs in online retail, consumer services, and digital adoption. These areas are seen as having substantial business potential, offering innovative solutions to Indonesian consumers and potentially creating new market dynamics.
Support and Value Addition to Startups
Beyond financial investment, AC Ventures actively supports its startups in several key areas including business development, strategic partnerships, talent acquisition, government relations, financial planning, fundraising, marketing, PR, and ESG initiatives. This comprehensive support system is designed to nurture startups and guide them towards sustainable growth and success.
Focus on Environmental and Social Impact
AC Ventures prioritizes investments in companies with significant environmental and social impacts. The firm’s third fund, Fund III, demonstrated a notable impact ratio of +37%, surpassing the Nasdaq Small Cap Index average. This focus aligns with AC Ventures’ commitment to creating a positive societal footprint through its investment choices.
Promoting Gender Parity and Inclusivity
The firm champions gender parity and inclusivity, with 50% of its leadership comprising women. In its portfolio, 41% of C-level leaders are women, reflecting a commitment to diverse and inclusive leadership. AC Ventures actively supports initiatives like the UN’s Women’s Empowerment Principles and the IFC’s Invest2Equal program, emphasizing an inclusive approach in hiring and leadership development. The firm also showcases the success stories of female-led startups, setting powerful examples for the broader ecosystem.
A Beacon of Hope in Challenging Times
In summary, AC Ventures’ successful fundraising for ACV Fund V and its strategic focus on impactful investments represent a significant achievement in the current challenging economic climate. By fostering innovative startups and emphasizing environmental and social responsibility, AC Ventures is not only contributing to the vibrant startup ecosystem in Southeast Asia but also setting a benchmark for sustainable and inclusive venture capitalism.
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