Silicon Valley-based 500 Startups, an early-stage seed fund and startup acclerator, has raised $85 million for its third global fund, 15 per cent short of its original target, according to a report in Wall Street Journal. The company has closed the third fund at this amount.
Speaking on the funding, McClure, co-founder of 500 Startups, said, “It wasn’t an easy road, US institutions took exception with the firm’s “index fund” approach to venture capital and the small stakes it takes in companies, among other reasons.”
McClure co-founded 500 Startups with Christine Tsai in 2010 with an aim to assist consumer and small & medium sized internet startups with funding and incubator programmes. According to the company, all of the three 500 Startups’ main funds had a net investment rate of return of about 20% at the end of the second quarter.
The firm’s 1,200 portfolio companies include such startups as Credit Karma Inc., Intercom Inc., Twilio Inc., Talkdesk Inc. and Udemy. It plans to invest in some 350 to 400 startups this year, Mr. McClure said.
500 Startups has accelerated over a 1,000 startups across 50 countries since 2010. It has launched a series of microfunds in Asia in the recent past including $15-million South Korea fund called 500 Kimchis, Southeast Asia fund called 500 Durians, and $10-million Thailand fund called 500 TukTuks.
The company has also backed about 30 Indian startups from its global fund, including TargetingMantra, a personalisation platform for online businesses, and marketing firm ZipDial, which was acquired by Twitter in January. It is currently in the process of raising funds for its India fund Startupwallah.