Indonesian venture capital firm Alpha JWC closes third $ 433 million fund

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Alpha JWC Co-Founders Jefrey Joe and Chandra Tjan

Alpha JWC, the Jakarta-based venture capital firm, announced today that it has closed its third fund at $ 433 million. The company says this makes it the largest venture capital fund in Southeast Asia for early-stage startups and that it was oversubscribed, with an initial target of $ 250 million to $ 300 million. Investors in the third fund include the World Bank’s International Finance Corporation (IFC). Most of the LPs from the first two Alpha JWC funds also contributed.

Co-founder and general partner Jefrey Joe said he has started to see more interest in Southeast Asia from global investors, thanks to high-profile exits like the Bukalapak and Sea Group IPOs.

“It shows that there is enough value to create compared to a market as developed as the United States,” he told TechCrunch. He added that the new wave of investor interest began last year, as more startups, including Alpha JWC’s portfolio companies Ajaib, Kredivo other Car achieved unicorn status in a relatively short period of time (Ajaib, an investment app, became a unicorn two and a half years after its launch). Alpha JWC was the first institutional investor in the three startups.

Alpha JWC now manages around $ 630 million in assets across its three funds. During this year, the company says its portfolio companies have collectively raised more than $ 1 billion so far, with most raising follow-up funds within a year of Alpha JWC’s initial investment.

The company invests in early stages, or pre-seed, seed, and pre-Series A, and they are often the first institutional investors on a startup’s boundary table. Alpha JWC partners continue to work closely with their portfolio even as they reach later stages; for example, connecting them with investors in the United States, Joe said, or helping build their management teams.

Alpha JWC launched in 2016 with a first fund of $ 50 million, which invested in 23 companies. His second fund closed in 2019 at $ 143 million and was used to support 30 companies. The company said that the total payment value (TVPI) of its first fund reached 3.72x and its internal rate of return (IRR) is approximately 37%. The performance metrics for its second fund are even higher: TVPI of 3.45x and 87% of the IRR.

Most of the third fund is intended for Indonesian startups, but it will also invest in other Southeast Asian markets, such as Singapore, Malaysia, Vietnam, Thailand and the Philippines, focusing on companies that want to enter Indonesia. The checks will range in size from hundreds of thousands of dollars to $ 60 million in multiple stages. Like the first Alpha JWC funds, fund three is targeting 25-30 early stage startups and is taking an industry independent approach.

“We believe that at this time, there is no need to focus on the sector just yet,” said Co-Founder and General Partner Chandra Tjan. “The market is still early, it has a very high potential and there are many industries in which we can capture the local champion. But some of the sectors that we really like are software services, fintech, O2O models, and social commerce. “

Alpha JWC says at least eleven of its portfolio companies are approaching unicorn status, including the coffee chain Kopi Kenangan, B2B market GudangAda, the consumer goods producer Lemonilo and the digital financing platform for SMEs Financing companies.

While digital adoption continues to be driven primarily by Tier 1 cities like Jakarta, Joe said Indonesia’s smaller cities and towns are catching up fast. “Tier 2 and Tier 3 cities are following strongly and when that happens our potential will be unlocked and you will see massive and massive growth in the digital ecosystem.”

Alpha JWC co-founders say startups are starting to demonstrate better monetization plans, strategies, and stronger fundamentals early on, like Ajaib. This means clearer paths to exits, which in turn attract more investors to the region.

“We were the first institutional investors in Ajaib and from the beginning the founders had built a very strong fundamental mindset, not just spending money to get users, but building solid fundamentals,” said Tjan.

In a statement on IFC’s investment in Alpha JWC’s third fund, Kim-See Lim, its regional director for East Asia and the Pacific, said: “IFC’s partnership with Alpha JWC Ventures underscores our long-term commitment. with the economic development and digital transformation of Indonesia. . “

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