AC Ventures & The Indonesia Venture Capital Report 2023 with Adrian Li

Leong Chung Wei Bernard -

Fresh out of the studio, Adrian Li, founder and managing partner of AC Ventures joined us in a conversation to delve into the dynamics of the venture capital scene in Indonesia. He commenced by tracing his entrepreneurial journey, which spanned from the United States to China, and ultimately to Southeast Asia, culminating in his transition to venture capitalist. From there, he shed light on the investment thesis of AC Ventures, their decade of investing that led to their recent successful raise of US$210m to their 5th fund. He provided an in-depth analysis of the entire venture capital landscape in Indonesia, discussing its evolution over time. To conclude, Adrian shared his vision for AC Ventures, focusing on their intensified commitment to nurturing startups in Indonesia and across the broader Southeast Asian region.

"Indonesia is not of the scale of China and India. And some people argue that India and China are so vast, you can almost consider: North China, South China, East China and different parts of the world. But because Indonesia normally gets lumped into ASEAN, right? People think about, well, I don't want single country risk with a country of this size. And so that's where the differentiation came out. Nonetheless, this is our thesis. And we believe that the last 10 years have proven that thesis. So we continue to double down on that thesis. Again, we've invested in companies that are regional that come into Indonesia." - Adrian Li

Introduction

AC Ventures and the Indonesia Venture Capital Report 2023 with Adrian Li

  • As a start, as I interviewed your colleague Helen Wong from AC Ventures on this podcast last year, can you provide a short overview of AC Ventures, the investment thesis and how they think about the Indonesian market?
  • What is a typical day like for you as a venture capitalist?
  • If I reverse the question, what are the red flags which will deter you from investing in them? 
  • During the XA AGM, we chatted about the startup class of 2021 vs the startup class of 2023 in Southeast Asia, what are the differences that you observe and how well will they perform for Southeast Asia VC funds in the future?
  • One of the reasons why I want to speak to you is about the report “Indonesia Venture Capital Report 2023” put together by AC Ventures and Bain & Company last November. Can you describe the recent reset in the Indonesian venture capital industry and how investors are adjusting their strategies in the face of current market uncertainties​​?
  • How are changing investor preferences impacting the types of investments being funded in Indonesia, particularly regarding valuation multiples and unit economics​​?
  • Despite global challenges, Indonesia's VC deal value remained stable in 2022. What factors contributed to this resilience, and what does it indicate about the Indonesian market​​?
  • What are the main challenges startups in Indonesia currently face, and how are they adapting to the changing investment landscape​​?
  • Which sectors are witnessing the most significant growth in venture capital investments, and what trends are driving these investments​​?
  • How are the Indonesian government's regulatory policies, such as digital infrastructure and consumer protection laws, influencing the venture capital landscape​​?
  • Considering the positive macroeconomic context in Indonesia, such as a young population and a growing middle class, how do you see this influencing future tech and business investments​​?
  • With IPOs picking up in recent years, how is the exit landscape evolving in Indonesia's startup ecosystem, and what are the implications for future investments​​?
  • What trends are you observing in the types and sizes of deals, especially in the context of early-stage versus later-stage funding​​?
  • What is the one thing that you know about the Indonesia venture capital landscape that very few do?
  • How do you anticipate the role of Indonesia-centric VCs evolving, given their growing deal share and the shift towards early-stage investments​​?
  • Can foreign entrepreneurs thrive in the Indonesia startup ecosystem?
  • What does great look like for AC Ventures from your perspective?

Closing

Podcast Information: Bernard Leong (@bernardleong, Linkedin) hosts and produces the show. Proper credits for the intro and end music: "Energetic Sports Drive" and the episode is mixed & edited in both video and audio format by G. Thomas Craig (@gthomascraig, LinkedIn).