500 Startups, a Silicon Valley-based early-stage venture fund and seed accelerator founded by Dave McClure and Christine Tsai in 2010, is on its way to make at least 10-12 investments in the Indian startup industry this year. This comes after the global venture capital seed fund went through a slump in the South Asian country. Some of 500 Startups' global micro funds having already started making investments in the Indian subcontinent this year.

According to a statement given by Shalini Prakash, head, India investments and operations, 500 Startups to ET, the fund is on the verge of making seven deals in totality, starting with the investment in Spoyl, a used-goods marketplace in December 2016.

The ET report revealed that the investment in the used-goods marketplace comes through 500 Distro, which is a global micro fund under the 500 Startups umbrella, its first in the Indian subcontinent. 500 Fintech, another global micro fund also made its first investment in the South Asian country with Ftcash, a Mumbai-based payments company which facilitates digital payments for small and medium merchants.

According to Prakash, 500 Startups priority for now is to invest in more and more companies in the Indian subcontinent. "Several of our other micro funds, such as 500 Fintech, 500 Distro and 500 Durians, apart from the 500 Startups Fund itself, are looking at India to invest," she said to ET.

The Silicon Valley headquartered fund has invested in more than 60 Indian startups in its five year long journey in India so far. The 500 Startups global venture capital seed fund started investing in India in 2012, and witnessed its highest number of investments two years ago in 2015, when it did more than 20 deals in the South Asian country.

However, in 2016, the fund decided to slow down its activity in India by making a few accelerator deals and the Spoyl deal in December last year. This was mainly because the fund was in the process of launching a $25 million India-focused micro fund. Though the firm had announced the $25-million India-focused 'Kulfi' fund in early 2016, but it never went through. The fund was reportedly put on hold because of the changes in taxation and regulations. Additionally, 500 Startups also saw the departure of its partner Pankaj Jain from the firm, who was also heading the Kulfi fund.

But, according to Prakash, the fund was never taken ahead largely because the global venture capital seed fund was “recalculating its strategy”, while also closely “watching global events like Brexit and the US elections." She also added that tax and other problems were the smaller factors.

Some of 500 Startups’ successful investments in the Indian subcontinent include Little Eye Labs, which was acquired by Mark Zuckerberg's Facebook and ZipDial, which was eventually sold to Twitter. The fund has witnessed a total of five exits in India so far.

Post a Comment

Previous Post Next Post
Like this content? Sign up for our daily newsletter to get latest updates.