Why AC Ventures is doubling down on startups in Indonesia & then Southeast Asia with Adrian Li

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. But 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
Episode Highlights:
[0:00] Quote of the Day from Adrian Li #QOTD
[0:32] Introduction: Adrian Li, Founder & Managing Partner, AC Ventures.
[1:43] How did Adrian start his career?
[3:52] Adrian’s first entrepreneurial pursuit till his move to China & then Southeast Asia.
[7:29] The origin story of AC Ventures.
[9:26] The three key things he looks for when evaluating investment opportunities.
[13:08] AC Ventures, their perspective on the Indonesian market and their investment thesis.
[16:51] Typical day for a VC like Adrian Li
[18:39] The red flags that Adrian Li watched out for in founders & startup teams.
[20:30] The startup class of 2021 vs the class of 2023.
[23:56] The Indonesia Venture Capital Report 2023 by AC Ventures and Bain & Co.
[24:38] How investors are adjusting their strategies to the Indonesian market.
[26:40] Investor preferences, unit economics and valuations on the Indonesian market.
[28:27] The challenges that the Indonesian startups face and how they are adapting to them.
[31:16] The verticals that are working in the Indonesian market.
[33:59] Indonesia's regulatory environment is supportive of startups.
[36:17] The exit landscape for startups in Indonesia.
[41:04] The Indonesia startup landscape after the ZIRP era.
[44:28] The one thing that Adrian Li knows that very few do about VC in Indonesia.
[46:54] In-country VCs vs regional VCs in Southeast Asia.
[48:59] How should investors perceive Indonesia as a single market like China & India?
[50:45] Can foreign entrepreneurs thrive in the Indonesia startup ecosystem?
[52:38] What does great look like for AC Ventures?
[53:40] Closing
Podcast Information: Bernard Leong 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.
#adrianli #acventures #venturecapital #asean #southeastasia #indonesia #startups #vcasia

[@AnalyseAsia]

Do drop your feedback and we appreciate the comments and support on the episode.

[@ricklee9731]

I appreciate Adrian Li's focus on the founding team's importance. It really highlights the human element in successful investments. His comments on the resilience of the Indonesian market are encouraging, especially considering the global economic fluctuations.

[@user-yj7ur3xy4w]

Adrian’s point about Indonesia not being a tech innovator but a market where enabling technologies is an important one. Hence, the investor needs to fund the right startups in the right climate.

[@wangwu15]

The potential for technology exits in Indonesia and the evolving landscape over the next decade will be something to watch closely.

[@livednomed]

The conversation on the changing dynamics in Southeast Asia and the resilience of the Indonesian economy is an encouraging sign of the market

[@BernardLeong]

Here are the key takeaways: 🔍 The Journey: From being an entrepreneur to now a venture capitalist traversing from the US to China and then to Southeast Asia: the sheer dynamism and foresight in his approach to venture capital in Indonesia and Southeast Asia. 🌐 Investing in Indonesia & Southeast Asia: A Strategic Vision: His thesis? Leveraging successful business models from mature markets and adapting them to the local context - a 'time warp' investment strategy. It is not just copying wholesale but diving deep and adapting the strategy from time to time. 📈 The Importance of Exits in VC within Southeast Asia: Adrian's insights on the future of technology exits in Indonesia highlight a maturing market ripe for innovation. He underscores the evolving landscape for exits in the next decade, signalling a shift in the region's economic narrative. #VentureCapital #StartupEcosystem #SoutheastAsia #Indonesia