Angels say SE Asia ripe for 500 Durians

The trip also coincided with the launch of 500 Startups' first Southeast Asian fund - 500 Durians. The $10 million vehicle is the latest in a series if regional-focused micro-funds. India's 500 StartupWallah and Mexico's 500 luchadores were set up last November.

"With 600 million-plus people, a moderate but fast growing internet penetration, rapidly rising GDP and a young demographics, there a lot of good metrics for investing into the region," McClure says, explaining the attractions of Southeast Asia.

Like its sister funds in India and Mexico, 500 Durians is peripheral to 500 Startups' global funds. However, they target the same size investments, making initial commitments of $50,000-100,000 with the option of second and third rounds of $100,000-500,000.

The emphasis for 500 Durians will be on creating revenue, which represents a departure from the traditional Silicon Valley model where investments are often more capital intensive and growth-focused.

"It might also be scaled down on certain geographies because cost structures are lower," explains McClure. Furthermore, these funds will focus on seed state investments but 500 Startups is not running an accelerator program as it has in the US and Mexico.

500 Startups currently has $70million under management, with more than 75% deployed in the US, and half of that in Silicon Valley. The 100 portfolio companies outside the US are spread across 30 different countries. The firm's 2010 vintage debut fund raised $30 million. Its successor launched in April of last year and attracted $50 million.

"The idea is to have a main US global fund and then to have smaller regional vehicles - that allows us to be more aggressive in seeking out investments and invest at an early stage," says McClure. "If things are working out, we will follow up with an investment from the global fund."

The same groups of investors have been tapped by 500 Startups for this latest fund as in previous vehicles. They include angel investors from well-established internet companies in Silicon Valley, strategic investors and corporate venture groups. A longer-term objective, however, is to focus more on family offices and institutional investors for future vehicles.

And these future vehicles may include more region-specific funds. "The regions where we have venture partners and coverage are those where we are likely to introduce new vehicles," McClure says. 500 Startups also has venture partners covering Brazil and Greater China.

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• Topics
• Venture
• Early-stage
• Fundraising
• Southeast Asia
• Southeast Asia
• Venture
• seed
• 500 Startups
• Fundraising