Amid an uncertain environment for the global technology sector, innovative startups from Southeast Asia continue to attract the attention of investors seeking new growth opportunities. The region’s technology startups could be valued at US$1 trillion by 2025, up from US$340 billion in 2020.
Within Southeast Asia, Indonesia has been a bright spot in the tech and startup ecosystem in recent years. This trend is fueled in part by Indonesia’s resilient economy; the Asian Development Bank expects the region’s largest economy to grow by 5.4% in 2022 and 5.0% in 2023, supported by robust consumer demand and healthy commodity exports.
In particular, Indonesia’s early- to growth-stage investments present an attractive risk-reward profile for investors. Already home to a number of tech unicorns, the country saw startups raise US$9.4 billion in 2021, almost three times the US$3.42 billion raised a year earlier. Homegrown venture capital (VC) firms have also been actively investing, further driving the industry’s growth.
One key player in this space is Alpha JWC Ventures (Alpha JWC), Indonesia’s first independent and institutional VC firm. Established in 2015, the firm has grown to become a leading player in Southeast Asia’s VC scene, with total assets under management of around US$700 million across three funds. Its portfolio of over 70 companies features four unicorns and 27 centaurs, with valuations of between US$100 million and US$1 billion.
Thriving Despite Challenges
While the global economy has slowed down in 2022, the firm continues to invest in exciting ventures across sectors and sizes in Southeast Asia. Notable investments include a US$120 million Series C round for Indonesia’s leading e-grocery startup Sayurbox and a US$30 million Series B round for regional e-commerce aggregator Una Brands.
Despite massive correction in valuations hitting tech companies globally, Alpha JWC continues to see improvements in its fund performance. This year, its net asset value has increased by 10.5% for Fund 1 (Vintage 2016) and by 8.2% for Fund 2 (Vintage 2019) compared to last year. Meanwhile, its Fund 1 DPI has reached 0.46x and its Fund 2 DPI is at 0.35x.
The company says its consistent stellar performance is not possible without the right investment strategy and portfolio management. The firm prides itself on its deep market expertise and ability to shape trends.
However, what sets Alpha JWC apart from its peers is its focus on value creation through its Alpha-X initiative. Having held on to this approach since the firm’s inception, Alpha JWC has perfected its strategy for portfolio support. With around 40 team members in Indonesia and Singapore, the firm is ready to help founders grow on all fronts, from business strategies and marketing to government relations.
Jefrey Joe, Co-Founder and General Partner at Alpha JWC says, “Value creation has been our milestone and vision since the beginning of Alpha JWC Ventures. As a first mover, we have extensive learnings and experience to build a solid platform for our portfolio that keeps on getting better in any circumstances, including when facing the current market challenges.”
Finding and Nurturing the Next Big Things
Today, Alpha JWC portfolio companies are leaders in their respective sectors and across different venture stages—whether its health foods startup Lemonilo in the consumer segment or digital lenders Funding Societies and Kredivo in the fintech space.
The firm is also capitalizing on the significant opportunities in Indonesia’s agricultural industry, which is the largest contributor to the country’s GDP at 13%. Some of its investments in this space include e-grocery Sayurbox, agriculture-focused B2B platform AgriAku, and end-to-end chicken farm management startup Pitik.
“Our portfolio companies democratize agriculture with technology to disrupt the traditional industry landscape, covering upstream to downstream, as well as supply chain innovation,” says Alpha JWC’s Co-Founder and General Partner Chandra Tjan.
In another move to diversify its portfolio, Alpha JWC has entered Indonesia’s fast-growing electric vehicle sector with its investment in ALVA, which launched its first electric motorcycle Alva One in August. Indonesia has the highest two-wheeler ownership penetration in the world at around 42%. The country is also the third-largest market for two-wheelers, with 6 million motorcycles sold annually.
Through its investments, Alpha JWC has debunked the notion that early-stage startups and profitability are mutually exclusive concepts. For instance, one of the firm’s investee companies, coffee chain Kopi Kenangan, has chartered a path to profitability since its founding in 2017; its strategy has helped the company reach unicorn status in less than four years.
“We are seeing a more normalized investment landscape for tech startups, allowing founders to focus on business fundamentals and a path to profitability,” says Tjan.
Expanding the Ecosystem
Beyond growing its portfolio, Alpha JWC is also at the center of Indonesia’s tech ecosystem, from becoming the lead knowledge partner of the G20 Digital Innovation Network to co-hosting Grab’s accelerator program this year.
As part of its efforts to groom the next generation of tech talent and startup founders, the VC launched iGnite, a program that shares knowledge and expertise in collaboration with education institutions in Indonesia and Singapore. It also partnered with global companies such as Google to launch its workshop series under the Alpha-X program, which aims to upskill founders in its Southeast Asia portfolio.
Alpha JWC continues to set its sights beyond Indonesia, with 2022 marking the firm’s entrance into the Philippines through investments in mom-and-baby e-commerce platform Edamama and e-grocery startup Builtamart. To date, Alpha JWC’s portfolio is present in Indonesia, Singapore, Malaysia, Thailand, Vietnam, the Philippines, Taiwan, and the U.S.
“While we are building Indonesia to become the next global tech hot spot, we also want to build better economies in Southeast Asia so that it could offer the best yields possible for our investors. Aside from that, we are committed to nurturing founders and helping them build businesses that are not just profitable, but also have a positive impact on society,” Joe says.
