Grupara Ventures, one of Indonesia’s earliest VC firms, has undergone a revamp and is now in the market to raise its third seed fund under its new brand, Absolute Confidence.
In an interaction with DealStreetAsia, Absolute Confidence co-founder and partner Aryo Ariotedjo said the new fund has secured investments and commitments from several LPs, and will look to hit its first close in the first half of next year.
Ariotedjo declined to disclose the targeted size of the new fund. However, an industry source told DealStreetAsia that the firm is eyeing a corpus of up to $30 million.
The raising of the new fund comes after a two-year hiatus for Ariotedjo, who made his last investment for Grupara in 2018.
“I feel this is the right time to be playing the seed game again because those that were once there have upgraded and are no longer doing seed [deals],” he said. “We have invested early in a number of startups, and have had the upside. We believe that in terms of money making, seed is still a good choice for liquidity”.
Seed specialty
Founded in 2013, Ariotedjo’s Grupara Ventures was one of the pioneers in Indonesia’s VC scene, along with the likes of East Ventures and Ideosource, backing promising founders in the country’s very nascent tech startup sector.
Following the firm’s first fund, Ariotedjo, barely 26 at the time, relocated to the US to get a taste of building his own venture called Project Shoe, before returning to Indonesia in 2016 to raise Grupara’s second fund.
Among the notable bets from the second fund are online furniture retailer Fabelio, shipping startup Andalin and cloud kitchen company Dahmakan (now called Pop Meals), who have all gone on to raise subsequent funding rounds, roping in prominent regional and global investors.
At Absolute Confidence, Ariotedjo joins forces with a fellow experienced investor in the seed stage arena who come in as co-founder and fellow partner. While the identity of the person cannot be disclosed as yet, Ariotedjo says he is an early backer in a few notable startups.
Together, with investments and commitments from early LPs already at their disposal, the duo has started deploying funds, cutting cheques ranging between $100,000 to $300,000 into five companies over the past year, including BukuKas, HypeFast, WanFan, Podkesmas Asia Network and Dropezy.
Ariotedjo, who also runs a coworking space provider Wellspace and media company Wellshared, says his VC firm would be looking to back 2-3 more companies by the end of the year, and targets to have around 15 portfolio companies by the end of next year.
Eye on non-tech
The five portfolio companies comprises a mix of “tech and traditional” businesses, which appears to be the differentiating factor for Absolute Confidence.
The firm, Ariotedjo said, sees technology as something that supports and amplifies a business – not a key criteria for investment. The main consideration when investing, he adds, is business model, as well as the financials and economics related to it.
Podkesmas, for example, runs a talent management company in the field of podcast, which does not involve much tech, but generates extremely high traction and revenue. To illustrate the prospect of Podcast for investors, he points to the acquisitions of two podcast companies, Anchor and Gimlet, by streaming giant Spotify last year. While no price was disclosed for either deal, Gimlet reportedly cost Spotify $230 million.
However, of all the traditional sectors, Ariotedjo singled out F&B as one of the most exciting industries. With Pop Meals and rice bowl brand WanFan in its list of portfolio companies, Absolute Confidence already has a taste of the F&B journey, and wants more of it.
From his observation of the industry, he said that the payback period of opening a single store for F&B companies, particularly ones that play to the grab-and-go and delivery model, can be as quick as three months. Tech businesses, like e-commerce, in comparison, usually take far longer to recuperate investments it makes into customer acquisition costs.
“F&B has also been proven to be recession-proof and pandemic-proof, especially the takeway models. The resilience is proven,” he said.
Interestingly, many players in non-tech businesses, including F&B and podcast, are pretty much ran conventionally, and prefer to seek traditional sources of financing. This, Ariotedjo said, is a challenge, but one that he would be keen to tackle.
Both WanFan and Podkesmas Asia Network, he claims, were not in the market for VC financing before the partners of Absolute Confidence came to back them.
“A lot of these traditional [businesses] do not want to meet VCs, because the idea of venture capital has never even crossed their minds, and so they can get intimidated (by VCs),” he said. “But we are interested, so any good companies that are not VC-investible we would like to explore,” he added.
