Image Credits: AC Ventures
In the middle of a long funding winter, AC Ventures’ latest news will give Southeast Asian startups hope.
The Jakarta, Indonesia-based venture firm announced today it has raised $210 million, finishing the final close on its fifth fund, called ACV Fund V. Limited partners include the World’s Bank’s IFC and investors from the United States, the Middle East and north Asia. More than 50% of the fund came from returning LPs and institutional capital makes up over 90% of its total.
AC Ventures has already started investing from Fund V in startups like Indonesian electric vehicle maker MAKA Motors and sustainable farming startup Koltiva. The firm now has over $500 million in assets under management across its five funds. Fund V will add around 25 companies to AC Ventures’ current portfolio of 120 startups. Its check size will range between $2 million to $5 million, but depends on investment opportunities. For example, startups that are growing quickly and align with AC Ventures’ impact goals might get a check of around $20 million to $30 million.
When asked what raising Fund V was like during the ongoing funding slowing down, co-founder and managing partner Adrian Li tells TechCrunch “2023 was a challenging time for venture and technology businesses in the context of fundraising, perhaps one of the toughest in the past decade.” On the other hand, AC Ventures found new and returning limited partners who saw the same upside in Indonesia and Southeast Asia as it oes.
“Our limited partners share a firm belief that challenging times often yield the best investment opportunities,” Li says. “We have strong confidence that our latest fund will prove to be one of the best vintages, thanks to Indonesia’s ongoing, long-term demographic trends and robust economic fundamentals.” He adds that over the past year, the AC Ventures team has met more high-quality teams that prioritize profitability and are available for investment at good valuations than in the past.
AC Ventures invests across Southeast Asia, but Indonesia is at the top of its investment strategy because the country represents 40% of the region’s economy. Jakarta’s economy is expected to grow to $360 billion by 2030 and the country has pro-investment policies, including initiatives and reforms to make its digital economy stronger. AC Ventures co-founder and managing partner Michael Soerijadji says Indonesia’s economic growth is driven in large part by private consumption, plus manufacturing, services and exports.
For Fund V, Li said the firm is especially interested in fintech, e-commerce, health tech, MSME enablement and climate. The team is also excited by startups that address consumers in areas like online retail, consumer services and consumption upgrades as digital adoption continues to grow.
“We believe there’s substantial business potential that can tap into these changing patterns and offer unique, value-driven solutions to Indonesian consumers which can not only displace incumbents but drive new markets as well,” Li says.
AC Ventures works with its startups by supporting their business development and strategic partnerships, giving them advice on finding talent, government relations, financial planning and fundraising. It also advises them on marketing, PR and ESG.
One of AC Ventures’ priorities is investing in firms that have high environmental and social impacts. It says that its third fund, Fund III, had an overall impact ratio of +37% as measured by Finland’s The Upright Project, putting it above the Nasdaq Small Cap Index average of +29%. Managing partner Helen Wong says that when AC Ventures looks at startups, it runs baseline assessments across four areas: environment, health, society and knowledge.
It also strongly encourages gender parity. Fifty percent of its leadership are women, and in its portfolio, 41% of C-level leaders are also women. Wong says AC Ventures is a signatory of the UN’s Women’s Empowerment Principles and IFC’s Invest2Equal program. It encourages its companies to take an inclusive approach to hiring and developing leadership and has hosted events with LPs like IFC to facilitate networking and mentorship for female founders.
“Showcasing the success stories of female-led startups in our portfolio is another key aspect,” she says. “It sets powerful examples for others to follow.”