Indonesia-based venture capital firm Alpha JWC Ventures, which has closed its third fund last month, will bank on the flexibility of the larger fund size as it actively seeks opportunities to invest in startups across Southeast Asia.

The firm, which has invested in several small and medium enterprises (SME) solutions companies, like GudangAda and UnaBrands, also believes that these firms will be the “next big trends” in the region.

Alpha JWC closed an oversubscribed third fund at $433 million last month, securing its position as Southeast Asia’s largest VC fund targeting early-stage companies. The fund saw strategic investment from global and regional Limited Partners and investors, including World Bank’s International Finance Corporation (IFC) and Morgan Stanley Alternative Investment Partners.

“Our Fund III is Southeast Asia’s largest early-stage fund. Having a larger fund not only makes us a much stronger firm but also empowers us to invest more in founders to realize their ambitions. In the past, we typically invested in six to eight new companies each year. But this year alone, we have invested in at least 16 – with some nearing deal closing – in some of the region’s biggest Series A rounds,” Alpha JWC Ventures Co-Founder and General Partner Jefrey Joe told TechNode Global in an interview.

“With a larger fund, we can be more flexible with our ticket sizes. For example, we can invest as low as $100,000 in a pre-seed round or we can also lead or co-lead a $50 million Series B round. More importantly, we can invest up to $60 million per company in multi-stage funding. We have also expanded our team which enables us to process deals quicker,” he explained, adding that the firm also has the ability to support startups in multiple follow-on rounds.

Alpha JWC’s fundraise also comes at a time when investors are pouring funds into Indonesia in a bid to participate in the burgeoning startup ecosystem which saw the emergence of at least six tech unicorns in the country this year alone.

Earlier this month, Indonesia-based VC firm AC Ventures had closed its Fund III with over $205 million in committed capital. The fund was oversubscribed and participated by global and regional institutional investors, including the World Bank’s International Finance Corporation (IFC) and Disrupt AD, Abu Dhabi Developmental Holdings (ADQ) venture platform.

In September, “Indonesia-only” VC firm Intudo Ventures, announced the closing of Intudo Ventures Fund III, a $115 million venture fund dedicated to investing in Indonesian homegrown companies capitalizing on the rapid growth of private consumption and rising middle class in the country. The fund was oversubscribed and raised in less than three months, attracting commitments from institutions, funds, and family offices, spanning the United States, Europe, and Asia. Notable limited partners include Black Kite Capital, family office of Koh Boon Hwee; Wasson Enterprises, family office of former Walgreens CEO Gregory Wasson; PIDC, investment arm of Taiwan-based international food/beverage and retail conglomerate Uni-President Enterprises Corp, among others.

The overall internet economy in Indonesia will likely reach $146 billion in value in 2025, growing at 20 percent compound annual growth rate, according to the report published by Google, Temasek, Bain & Co

While Alpha JWC Ventures is a regional investment firm, it focuses mainly on Indonesia, the most populous country in the region.

“Not only is it the region’s largest market with a diverse population and complex challenges that can be solved through technology – thus, the potential for tech companies to grow is limitless – but also because we are Indonesians. We believe we are in a unique position with strong credentials to give the best value-add and unfair advantage to Indonesian startups and investors looking to invest in the country,” he added.

Joe said the firm is sector agnostic and it invests in early-stage to growth-stage, from Seed to Series B and beyond.

Commenting on the next big trends in Indonesia and Southeast Asia, he opined that not all trends that work in the US or China would work in Indonesia and Southeast Asia and vice-versa.

“The culture is different and the problems are different. Some might work, but most would need localization or an entirely different solution,” he said.

“In the past years, we have set the trend for FinTech, the consumer sector, and even food and beverages (F&B). These trends will continue to grow in Indonesia. We have also invested in several small and medium enterprises (SME) solutions companies, like GudangAda and UnaBrands, and we believe that these will be the next big trends in our region,” he added.

Alpha JWC has about $630 million in assets under management (AUM) across its three funds, according to earlier reports.

Despite the ongoing pandemic, Alpha JWC’s portfolio companies collectively raised more than a billion dollars in 2021. It also welcomed three unicorns this year: Indonesia’s largest Buy-Now-Pay-Later company Kredivo; Singapore-headquartered used car marketplace Carro, and online brokerage platform Ajaib. In all three cases, Alpha JWC was the first institutional investor.

Alpha JWC also has more than 11 companies nearing unicorn status, including Indonesia’s grab-and-go coffee chain Kopi Kenangan; Indonesia’s B2B marketplace GudangAda; healthy consumer goods producer Lemonilo; and Southeast Asia’s largest peer-to-peer platform Funding Societies.

In the interview, Joe also gave his opinions and suggestions on how Indonesia’s startup ecosystem could improve further.

Below is the edited excerpt of the interview:

As more foreign funds and local funds look into Indonesia, has such a trend affected Indonesian startups’ valuation? Is it more competitive in deal-sourcing? How will Alpha JWC differentiate itself/ensure its competitiveness? Where are the opportunities Alpha JWC sees in Indonesia? Is there any sector Alpha JWC prefers/prioritizes? Any ticket sizes set?

Our Fund III is Southeast Asia’s largest early-stage fund. Having a larger fund not only makes us a much stronger firm but also empowers us to invest more in founders to realize their ambitions. In the past, we typically invested in six to eight new companies each year. But this year alone, we have invested in at least 16 – with some nearing deal closing – in some of the region’s biggest Series A rounds.

With a larger fund, we can be more flexible with our ticket sizes. For example, we can invest as low as $100,000 in a pre-seed round or we can also lead or co-lead a $50 million Series B round. More importantly, we can invest up to $60 million per company in multi-stage funding. We have also expanded our team which enables us to process deals quicker.

Due to our ability to back startups in multiple follow-on rounds and provide more hands-on support (including through our value creation team), we are coveted by founders as a preferred partner in their journeys.

We are a regional investment firm, but our main focus is Indonesia. Not only is it the region’s largest market with a diverse population and complex challenges that can be solved through technology – thus, the potential for tech companies to grow is limitless – but also because we are Indonesians.
We believe we are in a unique position with strong credentials to give the best value-add and unfair advantage to Indonesian startups and investors looking to invest in the country.

That being said, we are sector agnostic and we invest in early-stage to growth-stage, from Seed to Series B and beyond.

On your exit strategy: How many years would you hold an investment? Any preference between IPO and trade sale? What kind of return are you expecting?

There is no exact tenure set for an investment. Although exit strategy is important, our focus lies in giving the best support for our entrepreneurs and companies to grow. Through this mindset, we can do what is best for both the firm and the startups. So far, we have nine full and partial exits through mergers and acquisitions (M&A) and secondaries. In the coming years, we are also expecting IPOs from some of our portfolio companies.

Are there any tech trends or tech startups or you see elsewhere that you think should be brought into Indonesia/Southeast Asia?

Not all trends that work in the US or China would work in Indonesia and Southeast Asia (and vice-versa). The culture is different and the problems are different. Some might work, but most would need localization or an entirely different solution.
In the past years, we have set the trend for FinTech, the consumer sector, and even food and beverages (F&B). These trends will continue to grow in Indonesia. We have also invested in several small and medium enterprises (SME) solutions companies, like GudangAda and UnaBrands, and we believe that these will be the next big trends in our region.

I think the local market (or the Southeast Asia region) will have its fair share of outstanding and capable entrepreneurs who will set their own trends that would work here.

Any suggestions or advice on how the ecosystem in Indonesia can be improved? (for government, startups, investors)

The Indonesia startup ecosystem is definitely thriving and flourishing with an unprecedented number of unicorns and investments flowing into the country. Potential for improvement would entail continued encouragement and building a culture of entrepreneurship, and this includes developing the environment in which startup founders are set up for success.

While funding remains the most essential resource (more so than ever before in fact), we need to also ensure that we have the talent resource. An idea is great, but a founder needs a skilled team to bring it to life and into the market. We need to make sure we are poised to develop the right local talent and skillsets given the burgeoning need and also competitive fight for talent. This would mean access to education, up-skilling, and training.

Lastly, infrastructure-wise, connectivity can always be better (not just in Indonesia). This could be as physical as having better road networks to having stronger and more powerful internet connectivity.

That way users can access different offerings easily, whether it is food delivery or trading stocks on the mobile. With that said, I think Indonesia is in a very good position and is poised for even greater growth.

Indonesia’s Alpha JWC Ventures closes $433M Fund III, the largest early-stage fund in Southeast Asia