Silicon Valley VC firm 500 Startups’ Southeast Asia arm is set to hit the final close of its $50-million second vehicle this month, industry executives aware of the development told this portal.
The firm is also examining if it can expand the fund size beyond $50 million as 500 Durians II has been oversubscribed, a decision it is expected to take later this month.
500 Startups, which had launched in this region in 2013, with a $10-million Durians I fund, counts ride-hailing app Grab, SG-headquartered commerce app Carousell, and Indonesian unicorn Bukalapak among its portfolio companies. The VC firm also runs a $10-million Vietnam micro-fund and the $20-million TukTuks II focused on investments in Thailand.
It launched its second vehicle in late 2016, with a mandate to invest in about 200 seed-stage companies in the region. The firm, led by Khailee Ng in Southeast Asia, has been making investments from 500 Durians II and has so far committed anywhere between $50,000 to $150,000 to 40 startups from this vehicle. It plans to put in an additional $500,000 into companies that have shown exceptional progress, after receiving seed funding (from it).
When contacted, 500 Startups declined to comment on the status of its Durians II vehicle and its final close.
Its second fund for this region was initially slated to hit the final close last year, but the process was delayed after 500 Startups founder Dave McClure resigned and was forced out in July last year following multiple allegations of sexual harassment and assault. It took several months for its new boss Christine Tsai to reboot the venture capital firm, allowing its different units to resume fundraising.
In Southeast Asia, the firm has expanded the team to add Reena Sharma, an investment banker to help with fundraising, and Andre Marcel Bally, a former fighter pilot and Preqin analyst to handle LP-GP performance matrices.
500 Startups is doubling down in this region as Southeast Asia’s internet economy is poised to cross $200 billion by 2025, according to a December 2017 report by Google and Singapore fund Temasek Holdings. The region’s internet economy, which spans ride-hailing apps to online travel, is growing at a compound annual growth rate (CAGR) of 27 per cent, outpacing last year’s projection of a 20 per cent 10-year CAGR, the report said. The region also has 330 million monthly active internet users, making it the third largest online base of consumers globally.
The report also added that between 2016 and Q3 2017, Southeast Asian internet companies were able to raise more than $12 billion of capital, as compared to only $1 billion in 2015, and the region’s seven unicorns — Go-Jek, Grab, Lazada, Razer, Sea Ltd. (formerly known as Garena), Traveloka, and Tokopedia — accounted for a large majority of the funds raised.
Globally, 500 Startups manages over $400 million in committed capital and has invested in more than 2,000 companies including Twilio, SendGrid, Credit Karma, Canva, Udemy, Intercom, and Talkdesk.