Adrian Li (left) and Donald Wihardja (right) of Convergence Accel.
Last week Jakarta’s newest venture capital firm Convergence Accel announced its first investment in Female Daily Network; a US$1 million round led by seasoned Indonesian VC Ideosource.
While Convergence Accel is brand new to Indonesia’s startup scene, its founder and managing partner Adrian Li has been in Jakarta since June 2013. An ex-Rocket Internet managing director, Li is also the co-founder of Qraved, one of Jakarta’s well-known foodtech startups. Donald Wihardja, Li’s partner at Convergence Accel, is the former country manager and chief information officer of 2c2p, one of Southeast Asia’s biggest players for ecommerce payment solutions. Wihardja is also the former head of the Indonesian Ecommerce Association.
“I always wanted to start a VC,” says Li. “The strongest motivation for me was that I always believed in the idea of empowering entrepreneurs. For Donald, he’s also long been excited about this. He’s been in Indonesia’s tech business longer than most people, and so we decided to put together our complimentary skillsets and networks.”
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Helping local startups reach series A
Currently, Convergence Accel’s fund has around US$25 million ready to be spent on Indonesian startups. Apart from Indonesia’s Bakrie Group, which is making strong moves into the archipelago’s tech space, Li didn’t disclose the identities of Convergence Accel’s backers or their amounts contributed to the fund. He did mention, however, that the fund is still open for investment but that he doesn’t want to let it exceed US$30 million in total.
Li claims Convergence Accel is not a corporate venture capital firm, but rather an independent entity structured much like a Silicon Valley venture firm with both investment partners and limited partners. Li confirms that the money in Convergence Accel’s fund comes from family offices and high net worth individuals in Indonesia, China, and the US.
Li adds that Convergence Accel is not yet focusing on specific sectors for investment. “Right now we have a geographic focus,” explains Li. “First and foremost, the companies must be located in Indonesia, and then we’ll look at many sectors. We want to invest in 25 to 30 companies, then reserve funds to help those companies succeed in the future.”
A need for speed without a lot of data
So far, Convergence Accel has screened over 100 companies and conducted in-depth due diligence on around 20 of them. Li says Convergence Accel’s sweet spot for investment will typically be less than US$500,000. Li refers to this amount as “pre-series A funding.”
Li believes Indonesia is a challenging market for investors because there’s not an abundance of data or case studies to look at when making decisions about which companies are likely to succeed in the archipelago. “It’s a bit difficult because we have to be quick in filtering down the ones which we consider to be real options,” says Li. “We don’t want to be the first money in, so we like to see companies that have gained traction already with money from friends, family, or angel investors.”
Although the firm has the word “accel” in it’s name, Convergence Accel will not create a traditional incubator or accelerator in Jakarta. Instead, Li and Wihardja simply aim to use their collective network and experience to guide their portfolios while trying to be as “hands on” as possible with each one. Li declined to give names of startups he’s interested in at the moment, but says the he has met several socially responsible ones that he likes through the Endeavor Indonesia network. “I think startups that are related to micro lending for farmers, or using tech to improve agriculture and alleviate poverty deserve a lot of recognition,” says Li.
This post Meet Convergence Accel, Indonesia’s newest venture capital firm appeared first on Tech in Asia.
Meet Convergence Accel, Indonesia’s newest venture capital firm
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