A Pair of $25M Funds Launched for Indian Startups

2015 witnessed a number of startups emerge onto the scene. The flow of investment and the boom in the hyperlocal industry headlined the progress. 2016 is poised to be even bigger. 500 Startups has launched a couple micro-funds to help the upcoming Indian startups.

Gone are the days when one individual had to get down and look for grocery products or look for a plumber to fix the broken tap. The smartphone revolution and the innovation of the startups has made everything available at a click or a smartphone swipe. Earlier the focus was on tapping just the major cities and towns. However, the startup sector has changed drastically. The majority of the startups are now looking to tap the huge potential offered by the tier II and tier III cities. The startups, the ones who made the headlines in 2015 mainly included vehicle-driven startups and hyperlocal companies. However, 2016 can be big for the FinTech startups. Big names in the industry and business veterans like Ratan Tata also became an avid follower of the Indian startup culture. Mr. Tata in Snapdeal, Urban Ladder, and Blue Stone. Ratan Tata made 11 investments, including Ola, Paytm, Urban ladder, Xaiomi, Kaaryah, Holachef, CarDekho, and Lybrate. His counterpart from Wipro, AzimPremji, had also invested in Myntra and Snapdeal in 2014, while Infosys Founder Narayana Murthy invested in Amazon. With the mission of providing an additional boost to the India-centric startups, 500 Startups has launched a pair of micro-funds of $25M each. The EdTech and the FinTech sectors would largely benefit from these funds. The trends in the education and the financial sectors are getting more vocational with each passing day. The wheels of investment have already started to turn in this direction. More funds will be allocated to the startup companies, emerging from this sector. One can predict that the majority of the funds would be used for the Indian companies. However, 500 Startups has also revealed that the funds will also cater to emerging companies from the sub-continent like Sri Lanka and Bangladesh. Financial sector already showed towards the end of the year, that it will be one of the most interesting sectors in 2016. FinTech startups are going to witness unprecedented growth. And, with the government bringing uniformity to provide the genuine startups with benefits, the road ahead looks indeed bright for the emerging entrepreneurs. According to the uniform norms for the startup sector, entities formed by splitting or re-construction of existing businesses will not be considered as startups. In order to obtain tax benefits a startup so identified under the above definition shall be required to obtain a certificate of an eligible business from the Inter-Ministerial Board of Certification. Thus, a lot of things are happening in the startup ecosystem & companies like 500 Startups can help the new startups immensely with their backing.

The Dave McClure led California-based early-stage seed fund’s regional fund called 500 Kulfi will focus on early stage companies with product-market fit and demonstrated traction. Although the fund is sector-agnostic, but it will focus on startups dealing in FinTech, EdTech, Health & Wellness, Data Analytics, Content and SaaS/SMB. Pankaj Jain, partner at 500 Startups and responsible for 500 Kulfi, said on the official company blog, “While the industry has been tweeting and blogging about doom and gloom hitting unicorns and startups alike, we believe the long-term opportunity remains as solid as ever.”500’s tagline for the new regional micro-fund, “Financial Services for the Rest of Us,” speaks volumes about the sector where they’re looking to target investments.


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