Indonesian VC Firm AC Ventures Closes $205 Million Fund, On The Hunt For Early-Stage Startups

Indonesia’s growing digital market continues to woo investors as early-stage venture capital firm AC Ventures managed to round up $205 million for its third fund.

Investors in the new fund, dubbed Fund III, include World Bank’s International Finance Corp. and Disrupt AD, the venture development platform of state-owned Abu Dhabi Developmental Holdings. The latest funding brings the firm’s total assets under management to about $380 million.

“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,” Adrian Li, founder and managing partner of AC Ventures, said in a statement.

Fund III has been deployed actively since its first close in March last year to 30 out of 35 targeted startups. Some of the investments include Shipper, Stockbit, Ula, Aruna, BukuWarung and CoLearn, which are already valued at $100 million or more. Among its early investments, two companies, Xendit and Carsome, have already reached unicorn status.

According to a report this year from Google, Temasek and Bain & Company, Indonesia will be the largest internet economy in Southeast Asia, with a gross merchandise value that is projected to reach $70 billion this year and will grow to $146 billion in 2025. Indonesia’s internet market is more than double compared to Thailand and Malaysia, which are projected to have a GMV of $30 billion and $21 billion this year, respectively.

“The growing base of internet users and tech-enabled services has made Indonesia home to many of Southeast Asia’s largest digital platforms,” says Azam Khan, IFC’s country manager for Indonesia, Malaysia and Timor-Leste. “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.”

AC Ventures sees that digital adoption has accelerated in Indonesia due to the pandemic that resulted in the rapid growth of the firm’s portfolio of investments. The invested startups managed to obtain over $500 million in follow-on funding from global investors such as Sequoia and Tiger Global.

“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,” says Pandu Sjahrir, founding partner of AC Ventures.

AC Ventures was established in 2019 following a merger between Indonesian VC firms Agaeti Venture Capital and Convergence Ventures. Partners in the firm have been investing in the early-stage Indonesian technology ecosystem since 2014 and have a portfolio of over 100 companies across its funds, making AC Ventures one of the largest Indonesia-focused early-stage VC firms.