#Asia 500 Startups puts creation of India fund on backburner


In 2012, Dave McClure, founding partner at 500 Startups, had tried to raise a US$5-million India-focussed fund but was unsuccessful

500 startups

Venture capital firm and startups accelerator 500 Startups has, for the second time, put its plans for an India-specific fund on the back burner, reports The Economic Times quoting three unnamed sources.

In March, Aerin Lim, director of investor relations at 500 Startups, had said the investment firm was raising US$10 million-US$20 million to create a separate vehicle focussed on Indian startups.

The fund was expected to be launched under the moniker ‘Startupwala’ in the middle of 2015.

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“Their overall strategy is changing given that they have struggled to raise money for their latest global fund,” said one of the sources. “So the conversations around an India fund has slowed down considerably—practically negligible over the past 6-12 months.”

This is not the first time that 500 Startups has put its India plans on hold. In 2012, Dave McClure, founding partner at 500 Startups, had tried to raise a US$5-million India-focused fund but was unsuccessful.

“We started the process two years ago but had to put it on hold because the market was not mature back then,” Lim had told The Economic Times in March.

Also Read: Indian startups hog VC attention in Asia in 2015

At the time, the fund, which manages assets of about US$200 million, was looking to offer US$50,000-US$100,000 per startup for an equity stake of 7 per cent in the ventures.

500 startups has already invested in a number of Indian companies since 2011 including TradeBriefs, Instamojo, PriceBaba, Sheroes.in, OnlineTyari, gazeMetrix and ZipDial.

The investment fund has has launched micro-funds in other parts of Asia, including a US$15-million South Korea fund called 500 Kimchis and a Southeast Asia fund called 500 Durians.

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