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Southeast Asia’s aCommerce raises $10M to prepare for Series B

ICE Graveyard 18/07/2016 Jon Russell

aCommerce, a Bangkok-based startup that helps e-commerce companies in Southeast Asia run their businesses, has landed $10 million in new funding ahead of a planned Series B raise later this year.

The company, which is currently active in Thailand, Indonesia and the Philippines, said this latest raise is led by MDI Ventures — a fund associated with mobile operator Telkom Indonesia — with participation from Australia-based fund Blue Sky and existing backer DKSH. Switzerland-based market expansion firm DKSH made an undisclosed strategic investment in aCommerce in December, which TechCrunch understands was worth between $20 million-$25 million.

E-commerce is showing some serious potential in Southeast Asia, as is evidenced by Alibaba’s $1 billion investment in Lazada earlier this year. aCommerce plays the role of enabler, helping e-commerce companies, brands and traditional retailers manage their online business through a range of services which cover inventories, warehousing, logistics, fulfilment and digital marketing. The company was founded in 2013 and has now raised closed to $50 million from investors, including a $10.7 million Series A in June 2014 and a $5 million bridge round last May alongside today’s reveal and the DKSH injection.

Like the previous bridge round, this new raise is designed to help the company ‘sprint’ before a larger round later in excess of $50 million this year. In other words, aCommerce said it still has money in the bank but wants to spend to grow to secure a more favorable raise. Specifically, it plans to expand its business to Malaysia, Vietnam and Singapore.

“We want to get maximum valuation with minimal dilution,” aCommerce Group CEO Paul Srivorakul told TechCrunch in an interview. “Instead of raising Series B [now], we’ve gone back to investors to raise more capital before a Series B at end of the year.”

(By the way, raising a Series B after already banking $50 million is certainly not the norm for Southeast Asia, and Srivorakul admitted that he doesn’t put a tag on the company’s funding efforts. “For us, we’re just raising it at our convenience,” he said.)

Srivorakul, who previously founded and exited group buying site Ensogo to LivingSocial and AdMax to online ad firm Komli, said there had been discussions with investors prior to the company’s last round so this new investment was already possible. For the Series B, though, he plans to pitch to look to new sources of capital.

Talking up his new backers, Srivorakul said that MDI Ventures could be hugely strategic in Indonesia, which recently overtook Thailand as the startup’s largest revenue generator.

“Their demand generation is massive,” he explained. “On the other side, customs and e-commerce laws are getting very complicated, these guys are the tech arm of the government so [we] find it exciting to build products around customs in Indonesia and keep building out our Indonesia play.”

aCommerce expansion to Singapore will see it reenter the country having previously quit in 2014. Admitting that first entry was a little too early, Srivorakul argued that aCommerce is coming back with a “partner” — GKSH, which he said he said is helping onboard new clients from its roster — and demand from existing customers in other markets which can make a difference this time.

He noted also that he is observing a much greater focus on sustainability when it comes to scaling emerging market startups. On those lines, he said he is confident that aCommerce could sustain itself in the wake of any kind of funding crunch or downturn.

“We can break even next year with the money we have now,” he told TechCrunch. “We can manage these [existing three] markets to profitability, but we need to capture three more markets [and] that’s where we’re looking to deploy this [new] capital.”

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