On Tuesday, 500 Startups announced the formation of two new funds: 500 FinTech – a vertical fund focused on the financial industry – and 500 Kulfi – a fund focused on early-stage investments on the Indian subcontinent. Each fund will control around $25M. These funds join the 3 main funds and 8 microfunds controlled by 500 Startups, which manage around $200M.
According to the announcement, the launch of 500 FinTech is the result of 6 years of investments in the industry. After these 6 years of involvement, 500 Startups will be looking to invest in companies that provide: “Financial Services For the Rest of Us.”1 These investments will be driven by a few key trends and developments:
- Financial Institutions are still not serving millennials, minorities, women, and emerging markets effectively
- Technology (especially smartphones) will slash the cost of delivering financial services to billions of underserved consumers and businesses
- Traditional financial institutions are not innovating fast enough to meet changing customer demands2
500 FinTech is a natural extension of the new FinTech accelerator program, which will host around 20 companies a year. 500 FInTech will be managed by 500 Partner Sheel Mohno (pictured above).
While 500 FinTech, as the name implies, is 100% focused on the financial industry, 500 Kulfi will be sector agnostic. That said, according to the announcement of the fund, 500 Kulfi will pay close attention to “FinTech, EdTech, Health & Wellness, Data Analytics, Content and SaaS/SMB,” startups. 3 Again, this is really a natural extension of 500 Startups activities. Since 2011, the firm has invested in over 50 companies in India. 500 Kulfi will be managed by 500 partner, Pankaj Jain (pictured above).