Alpha JWC hoping to plug Indonesia’s mentor gap
By Masyitha Baziad April 19, 2016
- VC firm says not just about returns, but about being a value-added partner
- E-commerce space is maturing; smart money’s on fintech, big data and SaaS
THE startup scene in South-East Asia is certainly ramping up. Singapore-headquartered Golden Gate Ventures, in its The Bamboo Report for the third quarter of 2015, said it expected Series A investments to hit US$120 million in 2016, double from last year.
Accounting for 40% of the region’s population, Indonesia has the potential to become South-East Asia’s fastest growing startup market, which is why many venture capital (VC) firms have emerged in the country over the last two years.
One of the latest, but with a limited portfolio, is Alpha JWC Ventures, a local independent VC firm that invests in early- to growth-stage technology startups, that was founded by Chandra Tjan, Jefrey Joe and Will Ongkowidjaja in early 2015.
There is a reason why it has a small portfolio, say the three cofounders, speaking to Digital News Asia (DNA) in Jakarta recently.
“We do not invest for the sake of getting huge returns – we invest to help the company grow and scale,” declares Will.
“We see ourselves as mentors, and we want to be a value-added partner for our portfolio companies.
“This includes helping them with their business plans and strategy, partnerships, revenue generation opportunities, and human capital strategy,” he adds.
Alpha JWC has eight companies under its wing, including financial technology (fintech) startups UangTeman, Kredivo, and Modalku; ‘romance e-commerce’ company AsmaraKu.com; and big data analytics company MediaTrac.
Similarity breeds a singular vision
Alpha JWC’s three cofounders have known each other for about six years, working together closely on some projects.
The three have collectively invested in about 40 companies, including Indonesia’s Tokopedia and Traveloka, Thai e-commerce solutions provider aCommerce; and Singapore-based tech blog Tech in Asia.
However, what finally brought them together were the market opportunity and their uniform vision, they say.
They chose to name their new venture ‘alpha’ as it represents ‘excess return’ or ‘above market returns’ in financial circles. That’s where the mentorship comes in too.
Jefrey, who was previously Groupon Indonesia chief operating officer, says that Indonesia’s startup scene lacks the business support and mentorship that are needed to help companies grow and scale.
“My background allows me to mentor and help companies from a product and technology point of view – however, this will not be enough to push greater growth,” he admits.
“With Chandra and Will in the team, we can now give cross-sector mentorship and help the companies thoroughly,” he declares.
This is also why this year, Alpha JWC aims to hire more experts from different sectors to add value to its portfolio companies.
For example, it has brought on board Erika Dianasari Go, a former project lead at US-based executive search firm Egon Zehnder, as its human capital management and corporate planning expert.
Help is but a call away
It’s a tag team model: With its experts – including the three cofounders, of course – Alpha JWC looks at what kind of help a portfolio company would need at a certain stage of its lifecycle, then plug in the expert.
“For example, if the startup needs help with building its product, then I will be the one who will guide and help them,” says Jefrey.
“However, if the company already has a great product that is getting good traction, perhaps it will need help to scale and recruit more people, and that is when Erika will come in and help them,” he adds.
Chandra quips: “It is really important for our startups to know that they can call us for help. We’re based in Indonesia, so if our portfolio companies need help, we’re just one call away, 24/7.”
Taking mentorship seriously is one reason why Alpha JWC does not want to stretch itself too thin by investing in too many companies, it says.
The VC firm claims it looked at more than 300 startups last year alone, and chose to focus only on fewer than 10.
The next wave
Alpha JWC says it is ‘sector-agnostic,’ meaning it would invest in a company in any industry, but it does have a preference for fintech and big data startups.
“We see the e-commerce and online marketplace space in Indonesia as maturing, which means the opportunity is smaller,” says Jefrey.
“The sector has almost everything in it; you name it, it is there – from baby and maternity products, to fashion and even new niches like romance such as AsmaraKu.com,” he adds.
Alpha JWC sees e-commerce startups as the first stage of the technology wave, because it is relatively easy to do, which also explains the flooded market.
“Now we have seen consolidation in the sector, and a few players are actually no longer in the market – this is a sign of maturity,” says Jefrey.
Fintech and big data however, are the two sectors that will be big in Indonesia’s next wave – mainly because these kinds of startups actually help solve problems, according to Will.
Fintech startups are in because they solve problems like financial inclusion, which is a big issue in Indonesia. As for big data, eventually all sorts of companies will have to start taking big data analytics seriously to remain competitive, he argues.
In Alpha JWC’s internal survey of the 300 startups it looked at in 2015, 21% were into the e-commerce business model and 17% into the online marketplace business model – two markets which already have a degree of overlap.
Only 10% were fintech startups, and only 7% played in the big data arena.
“We also see more startups choosing the Software-as-a-Service (SaaS) approach, and there is a lot of opportunity for this in verticals like logistics and healthcare,” says Jeffrey.
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