Alpha JWC Ventures' Focus and Plans Amid Pandemic

With many VCs performing tight curation, even postpone their investment plans to startup during the pandemic, Alpha JWC Ventures claimed to be quite aggressive in pouring fresh funds into startups in Indonesia. Reportedly, they have announced follow-on funding on 3 of the portfolios. Those include Kopi Kenangan, GudangAda, and Bobobox.

The three startups are Alpha JWC's preference, as the business model innovations in the industry engaged with people's basic needs. For example, FMCG - daily-consumed products, yet the industry is still constrained by supply chain structures and traditional transaction processes.

When the pandemic strikes and business activities are limited, these items cannot reach the end consumer as expected. Such startups as GudangAda plays an important role in providing solutions for traders to carry out the transaction (trading) flows, at various levels of the supply chain, in a simplified way through their marketplace platforms and logistics service.

Bobobox is also quite interesting. When the occupancy rate in the hotel industry has dropped dramatically, they provide long-stay accommodation for people who need adequate work-at-home facilities, and also modify their pods into medical rest space.

"We are looking for a startup with a clear vision, a distinctive value proposition, and an agile organizational and cultural structure, therefore, they can adapt to various challenges. Such companies will be able to maintain relevance, develop according to their potential expectations, and eventually became a market leader," Alpha JWC's Partner, Eko Kurniadi said.

Alpha JWC is also conducting an assessment of new startups in various funding phases. On the other hand, the team internally focused on helping founders in the current portfolio, both strategically and financial support in the form of follow-on funding.

Business adjustment during pandemic

In particular, Alpha JWC eyes structural changes in the startup business model, as a result of a pandemic that caused changes in consumer consumption behavior and patterns. Businesses are then 'forced' to look for new ways to maintain their relevance among consumers - including changes in the customer acquisition process, user experience innovation, and the search for new sources for monetization.

Another thing worth highlighting is the importance of strong business and financial fundamentals. The term 'growing at all cost' is no longer the single important line for startups. Startups are now required to show healthy unit economics calculations and clear business plans to achieve profitability.

On the other hand, adjustments or corrections to valuation calculations will also occur through natural selection. The number of startups with funding demand will rise, especially in difficult times. On the contrary, most investors take a more cautious and selective approach in choosing which companies to invest. It is due to the mismatch between supply and demand, price correction (valuation) in the market arose.

The tech industry has helped accelerate digital adoption in traditional industries. This has been visible in some sectors and it is expected that the changes are to spread to other industries such as FMCG, F&B, finance, agriculture, entertainment, and others. Pandemics also create opportunities for many consumers, who were previously conservative, to try technology products offering more convenience.

"Looking at some of the more mature (later-stage) startups in the sectors we discussed earlier, I believe they have the right ingredients to maintain this momentum, even after the pandemic ends - then, it's a matter of proper execution at the right time," Kurniadi said.

– Original article is in Indonesian, translated by Kristin Siagian