BUILDING on the success of 500 Durians I, global venture capital seed fund and accelerator, 500 Startups has launched 500 Durians II with Ashraf Sinclair, an Indonesian celebrity and angel Investor as their partner. 500 Durians is the Southeast Asian investment fund of 500 Startups.
As part of this collaboration, Ashraf will find and select Indonesian startups to be funded via the US$50 million 500 Durians II fund. Ashraf will work closely with 500 Startups managing partner Khailee Ng and 500 Startups partner Vishal Harnal in this venture.
By collaborating with Ashraf, 500 Startups aims to further continue supporting the growth of Indonesian startups by leveraging on his strong network and exposure not only as an actor, but also as an entrepreneur and angel Investor.
Ng realises that he was too slow in focusing on Indonesia and now he wants to catch up and build an Indonesian base. “If I had started here a few years ago, I would have 100 to 150 companies by now that we had invested in. It is quite hard to get into Indonesia’s wide ecosystem. People do not know who I am, that is why I feel lucky to have met Ashraf, who is also a Malaysian and as an entrepreneur and public figure, he can help in building connections with the local people,” Ng says.
500 Startups has invested in over 30 Indonesian companies, including Bukalapak, Kudo, Bro.do, HIJUP and Kredivo. Many in 500 Startups’ Southeast Asian portfolio of over 120 companies have expanded operations into Indonesia, making 500 Startups see the great potential in Indonesian startups.
As an entrepreneur and angel investor, Ashraf finds that the startup ecosystem has been growing in Indonesia over the past several years, and by working with 500 Startups, he hopes that he can assist in the growth of local companies. “For startups in Indonesia, it is hard to get funding especially when they are in the early stage. As 500 Startups only focuses on pre-seed and Series A round, we can help them to build the pipeline,” Ashraf adds.
For Ng, the percentage of SMEs in Indonesia is massive and economic growth of this country is built on entrepreneurship. “Lots of entrepreneurs do not realise that their businesses has the chance to grow and develop with the help of technology and funding. Through 500 Durians II, we want to give startups and entrepreneurs the chance to get funding and connections to Silicon Valley,” he says.
Ng targets 250 startups for 500 Durians II with 100 coming from Indonesia. They aim to achieve this goal by using Bahasa Indonesia, hiring more local female VCs and taking up the challenge to include all parts of the country. “As of now, there are only 32 companies from Indonesia that 500 Startups has invested in. We believe there is great potential in Indonesia in the country’s women, people who do not speak English, and everyone in all parts of this country.”
500 Durians II will invest US$50,000 to US$250,000 in each startup. The funding amount will depend on the startup’s opportunities for growth. 500 Startups is looking for companies that have assembled a small team or have a basic product to show. “We want to see an effort that has been made from an idea. These entrepreneurs must have a background that can relate to what they want to pursue and their businesses should be comparable to viable businesses models. “Types of business are also important, because some only relate to middle class consumption or are app or service providers for business. We hope to see more unexpected and broad opportunities coming to us.”
Ashraf feels that the background and experience of a founder are important as it could give new perspectives to an idea. “We are looking for businesses that can grow with the help of technology and also businesses that build around a tech ecosystem,” he adds.
Ng explains that 500 Startups will engage with entrepreneurs in terms of helping them to obtain and manage funds, coaching them about how markets work and connecting them with further sources of funding.
“First, we give them the funding and then within a week, we will steer them on how to make use of or save the money by negotiating with several advertisement providers. After that, we can provide services to coach them on how to grow in the market and the last step is to connect them to more investors for the next funding stage,” he explains.
Most startups discover 500 Startups through an introduction by fellow entrepreneurs. “It is a 360-degree connection where we get know to each other through ‘words’ from existing players,” he comments.
Ng says that for a startup to collapse is normal. What is important is that the founder is taken care of. “Only 20% of the startups we invested in collapse because it is very stressful. So, if this happens, it is important for us to give them a fresh start by offering a new opportunity or helping them to get a new job.”
Ng and Ashraf hope that 500 Durians II with its focus on Indonesia will reflect the culture and values of this country as well as boost the growth of entrepreneurial talent. “The competition will be there so we will need an emerging strategy by building bridges for startups to grow and do well in the Indonesian ecosystem,” Ng says.
“I hope that we can become their guide along the path and by partnering 500 Startups, I can help and support Indonesia’s creative generation. In addition, I hope that the Indonesian startups will continue in improving the economy in Indonesia, especially the creative industries.” Ashraf concludes.
500 Startups has invested in 1,800 technology startups all over the world since its inception in 2010, with a team of 150 based in 20 countries to manage seed investments across 60 countries.