Indonesia, a nation with a substantial population and a rapidly expanding digital marketplace, presents significant potential for new businesses. AC Ventures is aiming to capitalize on this potential with its $80 million ACV Capital III L.P. fund. The company revealed today that the fund has reached its initial closing, securing commitments totaling $56 million.

This funding will be allocated to approximately 30 Indonesian startups over the coming three years, with initial investments ranging up to $3 million for companies in the seed to Series A stages.

ACV, headquartered in Jakarta and staffed by a team of twelve, represents a collaborative effort between AC Ventures and Indies Capital. The firm’s founding partners include Adrian Li and Michael Soerijadji, both founding partners and managing partners at AC Ventures, alongside Indies Capital managing partner Pandu Sjahrir. Sjahrir also holds board positions at two prominent Indonesian companies, Gojek and Sea.

The partnership has already invested in nine startups: Shipper, Kargo, Stockbit, Bukuwarung, ESB, Co-Learn, KitaBeli, Aruna and Soul Parking. Its investment strategy centers on e-commerce, financial technology, businesses supporting MSMEs (micro, small and medium-sized enterprises), and digitally-enabled services, which, as Li explained to TechCrunch, could include sectors such as education and healthcare, in addition to entertainment.

ACV intends to actively support its portfolio companies, providing guidance on business development, executive recruitment, and subsequent funding rounds. The firm has also initiated programs like AC Academy to provide founders with training in areas like growth strategies and securing investment.

While internet access and digital payment methods have increased considerably in the last five years, e-commerce still represents a small portion of Indonesia’s total retail sales. This creates ample opportunities for innovation. For instance, Indonesia’s geography, consisting of 600 inhabited islands, results in a highly fragmented logistics sector. Shipper, a company backed by ACV, provides a platform that allows sellers to manage shipments from various providers in a single location.

Fundraising for ACV Capital III commenced prior to the COVID-19 pandemic, and despite the economic challenges caused by the crisis, Li believes that countries like Indonesia may experience an accelerated adoption of various technologies. BukuWarung, which focuses on digitizing operations for small businesses and local shops, recently introduced digital payments in response to the growing demand for online orders and contactless transactions. Similarly, ESB, another ACV portfolio company, has seen increased interest in its services as restaurants have shifted towards online ordering and delivery during social distancing protocols.

“We are observing compelling opportunities within Indonesia, and we are also noticing increased global interest in Indonesian startups,” stated Li. “As the world’s fourth most populous nation, there is significant potential to improve the delivery and efficiency of numerous products and services through the use of technology.”