Silicon Valley-based investment firm 500 Startups has launched a $25-million regional fund focused on India, Bangladesh and Sri Lanka.
Christened 500 Kulfi, the new fund will make between 25 and 50 deals per year, with focus on early-stage companies with product-market fit and demonstrated traction.
“Although we are sector-agnostic, we will take a closer look at financial technology, edutech, health and wellness, data analytics, content, SaaS (software-as-a-service) and small and medium businesses," Pankaj Jain, partner at 500 Startups and runs the 500 Kulfi fund, wrote in a blog post on the company's website.
Private equity (PE) investment activity in India was up 67% from 2014 to $21 billion, faster than any other large global economy, Jain quoted Walter Thompson, 500 Startups' journalist-in-residence as saying, adding that India had the second-largest Internet population in the world after China, more than 300 million users.
The number of smartphones in use in India is set to reach over 700 million by 2020. The median age in India is 27.3 years old. All this means that India is looking as sweet as Kulfi!, he said.
While at 500 Startups, Jain has led investments in over 50 companies across 6 countries.
"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. We see market changes as part of a natural cycle. While some good companies may have harder time raising money this year, others will find it easier to get great talent. Some consolidation and stepping back from irrational exuberance is a good thing. In an environment like this, the Warren Buffett investor will thrive because they look for value. We hope to continue to find value in many verticals across India," Jain said.
500 Startups has invested in over 50 companies in India since 2011 including ZipDial, SourceEasy, Instamojo, CultureAlley, SilverPush, KartRocket and Headout.
"Last year we did over 20 deals in India. However, we don't think that's enough. We're thrilled to announce our plans to do more in India; much, much more," Jain said.