Venture firm and seed accelerator, 500 Global, has successfully closed a $143 million financing round for its largest Southeast Asia early-stage fund to date. The new fund, named 500 Southeast Asia III or “500 SEA III,” attracted investments from a variety of limited partners including a sovereign wealth fund, public and private pension funds, a university endowment, and portfolio companies valued at over $1 billion from 500 Global.
Key Takeaway
500 Global has closed a successful financing round of
43 million for its third Southeast Asia early-stage fund, 500 Southeast Asia III. The fund aims to invest in startups focused on AI-enabled technologies and sectors such as rural digitalization, sustainable cities, healthcare, food security, and financial inclusivity.
Originally targeted for $75 million, 500 SEA III marks the third Southeast Asia-focused early-stage fund by 500 Global. The fund aims to primarily invest in businesses and “AI-enabled technologies” that contribute to rural digitalization, sustainable cities, human and machine productivity, healthcare, food security, and financial inclusivity. With plans to back 100 pre-seed, seed, and Series A startups, 500 SEA III will provide initial investments ranging from $250,000 to $500,000 across countries like Malaysia, the Philippines, Vietnam, Thailand, Singapore, and Indonesia.
Southeast Asia as a Growing Startup Hub
Southeast Asia has emerged as a thriving region for startups, poised to become a leading driver of global economic growth in the coming years. Factors such as increased urbanization, trade expansion, diversification of supply chains, real estate development, and a push for sustainability contribute to the region’s entrepreneurial ecosystem.
In the first half of 2021, venture capitalists made 393 investments in Southeast Asia startups, according to Cento Ventures. Reports suggest that startup funding in the region could reach upwards of $14 billion by 2023, further highlighting the region’s potential and attractiveness to investors.
Other investors actively participating in the Southeast Asia startup scene include Go-Ventures (now Argor Capital), which recently closed a $240 million fund for early-stage and mid-stage tech companies. Additionally, Square Peg Capital, Sequoia India and Southeast Asia, AC Ventures, and Lightspeed are among the notable investors with significant funds allocated for Southeast Asia-focused investments.
Potential Challenges and Outlook
While Southeast Asia presents promising opportunities, there are potential challenges that could impact investor sentiment in the future. Governments across the region have been tightening regulations and increasing taxes on tech companies, alongside initiatives to support their growth. For instance, Indonesia has implemented a law requiring value-added tax payments on local sales by tech firms with online services, even for purchases initiated offshore. Similarly, Singapore, the Philippines, and Malaysia have introduced digital banking licenses.
Despite these challenges, 500 Global remains confident in Southeast Asia’s potential. The venture firm has a strong track record in the region, having backed over 340 companies in the past decade. Notable success stories include investments in Grab, a ride-hailing app, Carsome, a car e-commerce platform, and eFishery, an Indonesian aquaculture startup.
Christine Tsai, CEO and founding partner of 500 Global, emphasizes the firm’s belief in the opportunities Southeast Asia offers. With a global portfolio of more than 2,800 companies across 80 countries, 500 Global aims to provide local expertise and a truly global venture platform to support founders in Southeast Asia.
Established in 2010 and headquartered in San Francisco, 500 Global manages $2.4 billion in assets and operates with a team of approximately 190 entrepreneurs, investors, and operators across 25 countries.
