Alpha JWC Ventures' Focus and Investment Plan in the Midst of a Pandemic

Although most VCs choose to strictly curate, even delay, their investment plans to startups, during the pandemic Alpha JWC Ventures claims that they are actually quite aggressive in pouring out fresh funds to startups in Indonesia. Noted they have announced continued funding (follow-on funding) for 3 of the portfolio. Among others are Memories Coffee, WarehouseAdaand bobobox.

The three startups were chosen by Alpha JWC, seen from the business model innovation in the industry which is basic needs from society. For example, FMCG — people's basic needs that are consumed daily, but the industry is still constrained by structure supply chain leaders and traditional transaction processes.

When the pandemic hits and various business activities become limited, these items cannot reach your destination pintu end consumers as expected. Startups such as GudangAda play an important role in providing solutions for traders so that they can continue to carry out their transaction flows (buying and selling), in various supply chain levels, much more easily through its marketplace platform and logistics services.

Bobobox is also an interesting example. At the moment occupancy rate in the hotel industry declined drastically, they provide lodging long stay for people who need adequate work-at-home facilities, and also modify pods they become a resting place for medical personnel.

"What we are looking for is a startup that has a clear vision, value proposition that distinctive, and organizational structure and culture that agile, so that they can adapt in the face of various challenges. A company like this will be able to maintain relevance, develop according to expectations based on its potential, and eventually become marketing leader," said Alpha JWC Partner Eko Kurniadi.

Alpha JWC is also doing assessment to new startups in various phases of the funding process. On the other hand, internally the team is also focused on helping founder in the fostered portfolio, both strategically and financially in the form of further funding.

Adjustment of startup business during the pandemic

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

Another thing that then becomes a concern is the importance of strong business and financial fundamentals. Term 'growing at all costs' is no longer the only thing for startups. Startups are now required to show calculations economic units sound and a clear business plan to achieve profitability.

On the other hand, adjustments or corrections to valuation calculations will also occur through the natural selection process. The number of startups that need funding will increase, especially in difficult times like this. On the other hand, investors mostly take a more cautious and selective approach in choosing which companies to fund. Due to mismatch antara supply and demand, price correction (valuation) in the market occurred.

The technology industry is also helping to accelerate digital adoption in traditional industries. This has already been seen in some of these sectors and it is hoped that this change will continue to quickly spread to other industries such as FMCG, F&B, finance, agriculture, entertainment, and others. The pandemic has also created an opportunity for many consumers, who previously tended to be conservative, to try technology products that offer convenience. 

"Looking at some of the more mature startups (later stage) in the sectors we discussed earlier, I believe they have ingredients The right way to maintain this momentum, even after the pandemic is over — from there, it's just a matter of getting the right execution at the right time," said Eko.