Ardent Capital nabs US$12.7 million from huge Indonesian conglomerate Sinarmas

Ardent Capital, the venture capital firm that aims to develop and unite Southeast Asia’s fragmented ecommerce market, announced this morning it closed a US$12.7 million investment led by Sinarmas, a major Indonesian conglomerate. The Ardent team states it will use the funding to ramp up operations in Indonesia for aCommerce, the firm’s flagship in-house startup, along with other businesses under the Ardent umbrella.

“Indonesia, as the largest market in Southeast Asia, has ample opportunities for business models already taken for granted in developed markets,” says Roderick Purwana of Sinarmas in a statement given to Tech in Asia. “Ardent’s focus on building scalable infrastructure and leveraging it to empower multiple e-commerce ventures with high speed and cost efficiency fits very well with our broader aspirations in the digital space.”

Ardent Capital began as a typical Asia-facing venture capital firm with an eye towards investing in Southeast Asian ecommerce firms. However, after completing a handful of investments, the Ardent team realized that their portfolio companies couldn’t scale effectively due to the the region’s fragmented and underdevelopment ecommerce infrastructure. Each country posed specific challenges for logistics, payments, and languages, which made regional plays difficult. This led Ardent’s Paul Srivorakul to found aCommerce – a company that centralizes management of the back-end logistics for ecommerce firms including warehousing, shipment logistics, order processing, payment processing, and marketing. Clients can pick and choose which services it purchases from aCommerce.

See: aCommerce just raised one of Southeast Asia’s largest rounds ever

In the past, Ardent Capital built aCommerce and its other in-house businesses (such as the Whatsnew.Asia group of ecommerce sites) from Thailand first, and expanded into other parts of Southeast Asia later on. Ardent Captial’s CEO Adrian Vanzyl tells Tech in Asia that the Sinarmas investment will let the company shift even more of its attention to Indonesia. “We’ve realized in the past year that the biggest market in Southeast Asia is Indonesia – not today, but tomorrow absolutely,” he says.

Nabbing a major Indonesian conglomerate as an investor certainly marks a boon for Ardent Capital. For one thing, looking beyond the size of the current round, Sinarmas has deep pockets. Financial support from a wealthy and well-connected domestic powerhouse means a lot for a company that’s aiming to create the Amazons and eBays of Southeast Asia from scratch, which takes time and money. “Having partner that can help support grand ambitions for creating the number one and number two players in the market is important,” says Vanzyl.

In addition, Vanzyl tells Tech in Asia that Sinarmas can also help Ardent and aCommerce lock in meaningful partnerships with its subsidiary firms. He points to Sinarmas’ telecom carrier, Smartfren, as a likely collaborator down the road. “Sinarmas has a large local carrier, with over 30 million active subscribers, most of which are on smartphones. [Meanwhile,] everything we do [at Ardent] touches on consumers at some end. So if we can get a mobile partner that can get our product directly in front of their 30 million subscribers – whether in the form of an app download or a marketing campaign.”

Ardent currently has warehouses in Jakarta and Bangkok. Following Sinarmas’ investment, the team will move into Sinarmas’ office space in the heart of Jakarta.

“The opportunity to aggressively go into Indonesia with a really committed partner something you dream of,” says Vanzyl. “For us, this is an accelerator way beyond anything we could have done on our own.”

Editing by Paul Bischoff; top image via Flickr user joe-joe