500 Global Closes $143M for Its Largest Early-Stage Fund in Southeast Asia

500 Global Closes $143M for Its Largest Early-Stage Fund in Southeast Asia

500 Global, the investment powerhouse, has successfully secured $143 million for its most expansive early-stage fund in Southeast Asia yet, named 500 Southeast Asia III (500 SEA III). The fund has attracted a diverse group of limited partners, including a sovereign wealth fund, pension funds, a university endowment, and 500 Global portfolio companies with valuations exceeding $1 billion. Initially aiming for $75 million, the fund has exceeded expectations.

To break it down, $100 million of the total amount is allocated for 500 SEA III, while the remaining $43 million is designated for growth-focused investments.

The fund's primary focus will be on startups and AI-driven technologies that contribute to rural digital transformation, sustainable urban development, workforce and machine efficiency, healthcare innovation, food security, and financial accessibility. 500 SEA III plans to invest in around 100 startups at the pre-seed, seed, and Series A stages, offering initial investments ranging from $250,000 to $500,000. The geographical focus includes Malaysia, the Philippines, Vietnam, Thailand, Singapore, and Indonesia.

The startup ecosystem in Southeast Asia is booming, fueled by factors like urbanization, trade diversification, and sustainability initiatives. According to Cento Ventures, 393 investments were made in the region's startups in H1 2021 alone. Funding in this sector could surpass $14 billion by 2023, as reported by Golden Gate Ventures.

Other key players in the region include Argor Capital, formerly Go-Ventures, which recently closed a $240 million fund, and Square Peg Capital with a $550 million fund targeting Southeast Asia, Australia, and Israel. Sequoia India and Southeast Asia, AC Ventures, and Lightspeed are also making significant investments in the region.

However, it's worth noting that the region is not without its challenges. Regulatory changes and tax hikes are on the horizon, as governments aim to balance growth and governance. For instance, Indonesia now requires tech companies to pay local sales VAT, even for offshore transactions.

Over the last ten years, 500 Global has invested in over 340 companies in Southeast Asia, including notable names like Grab, Carsome, and eFishery3. Christine Tsai, CEO and founding partner of 500 Global, emphasized the firm's continued commitment to the region, citing their extensive global portfolio and local expertise as key advantages for Southeast Asian founders.

Founded in 2010 and headquartered in San Francisco, 500 Global manages $2.4 billion in assets and has invested in more than 2,800 companies globally. The firm employs a team of approximately 190 professionals spread across 25 countries.

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