500 Startups, a prolific US seed fund and accelerator investing globally, has run into some setbacks in its international-fund ambitions, Wall Street Journal reported earlier this month.
The fund has pulled back from investing in China, put its Nordics and India fundraising on hold, and dropped plans for a Russia and Eastern Europe fund.
Members of the 500 Startups team interviewed by the US newspaper attribute these setbacks to geopolitical and economic factors as well as strategy reasons.
A few years ago, 500 Startups founder David McClure was a firm believer in Russia’s high tech potential. “The market looks pretty f…ing good in Russia for the next ten years. So the future is f…ing bright! Time to buy sunglasses!,” he stated in a Moscow event in 2012.
In September 2015, the fund announced new investing partners to invest in several new countries of the world, including Russia and Eastern Europe along with Japan, Germany, Israel and Turkey.
Diana Moldavsky, who previously worked with a successful Russian game publisher, joined the organization as Investment Partner covering Eastern Europe, Russia/CIS, Israel, Central Asia.
“Markets in the Eastern European region are still underserved at the seed stage. There are many top tech universities and as a result top level talented technical folks but not as much business expertise, experience building global businesses or doing business internationally,” Moldavsky stated at that time, saying she will “help fix this by bridging the continents.”
Since then Moldavsky has left the fund, while sanctions imposed on Russia and related political events have put a damper on the 500 Russia plan, McClure said to WSJ.
“You can’t control for global politics all the time,” he added.
500 Startups was initially formed as a general fund investing globally. More recently it began launching microfunds, focused on a geographic region. Six foreign microfunds have been raised to date, in Southeast Asia, Latin America, Thailand, Japan, South Korea, and Turkey.
Additional microfunds are planned in Canada and the Middle East, and 500 Startups is raising second funds for Southeast Asia and Latin America, WSJ reports.
