6 min read

From 500 Startups to 500 Global

How a contrarian investment strategy prepared us for the next decade.

Christine Tsai

Founding Partner and CEO

Published

15.10.21

When 500 Startups launched more than a decade ago, we were anything but conventional. This was not a traditional Sand Hill road venture capital firm, which tended to be tight-knit and exclusive. Instead, we sought to be inclusive. We flexed our operator backgrounds and diverse mentor network, but what stood out the most was our investment thesis and conviction in unobvious founders and geographies beyond Silicon Valley. 

From the very beginning, our investment strategy revolved around two contrarian theses:

1. Diversified portfolio. We believed that making multiple seed investments across sectors, including those that were underserved or overlooked by traditional venture capital, and building an expansive portfolio was key to de-risking early stage venture investing. Hence our original “500 Startups” name.

Industry players generally dismissed that approach as “spray and pray.” But the breadth and depth of our portfolio has served us well. Over the course of the past decade, we have invested on average in 275 companies per year. Today, our portfolio consists of more than 2,500 companies, spanning multiple sectors, stages, and geographies. This has allowed us to catch a glimpse of emerging trends, which led us to spot opportunities early on. 

As an example, we have generally backed SaaS companies at a rate well above the venture capital industry. It was a good move. SaaS has contributed to our first fund’s top decile TVPI performance. Some of our earlier investments include Twilio (2010), Talkdesk (2011) and Canva (2012). 

To date, our diversified portfolio boasts 33 companies valued at over $1B and 120 companies valued at over $100M — from fintech and productivity tools, to edtech and e-commerce.

2. Unobvious founders. We strongly believed that great founders and investable opportunities exist in all corners of the world and come in all genders, colors, races, nationalities, and backgrounds. We decided to invest across geographies and make venture capital inclusive.

Going into Latin America and East Asia in 2011, the Middle East in 2012, Africa in 2013 and Southeast Asia in 2014, we found markets with resourceful talent but little access to capital and venture capital know-how. Governments were eager to diversify their economy, and looked to Silicon Valley for inspiration.

This was not a long distance endeavor for us. To scout for the most promising startups, we established a local presence to understand the culture and market dynamics, whether in Kuala Lumpur, Mexico City, Taipei, Istanbul or Riyadh. Market expertise is essential to help build entrepreneurial ecosystems. 

Today, close to half of our portfolio companies are based outside of the U.S., and so are nearly 40% of the unicorns in our portfolio. Just this year, we’ve seen a number of our non-U.S. investments cross the $1 billion valuation mark, including Clip and Konfio in Mexico, Paidy and SmartHR in Japan, InnovAccer in India, and Bukalapak which became Indonesia’s biggest IPO this past August–to name a few.

Now that we’ve built a top decile track record with our first global fund, we are putting more capital to work with bigger checks and moving downstream with our largest fund to date. Founders don’t forget their first checks, and in many cases we were their initial investor. We value those relationships. 

It has been a rewarding journey for 500 Startups. As we embark on a new chapter as 500 Global, a name we have earned, we look forward to an exciting future. 

 

THE CONTENT IN THIS POST IS PROVIDED FOR GENERAL INFORMATIONAL OR EDUCATIONAL PURPOSES ONLY. 500 GLOBAL MAKES NO REPRESENTATIONS AS TO THE ACCURACY OR INFORMATION CONTAINED HEREIN AND WHILE 500 GLOBAL HAS TAKEN REASONABLE STEPS TO ENSURE THAT THE INFORMATION CONTAINED HEREIN IS ACCURATE AND UP-TO-DATE, NO LIABILITY CAN BE ACCEPTED FOR ANY ERROR OR OMISSIONS. UNLESS OTHERWISE STATED IN THIS POST, ANY PREDICTIONS, FORECASTS, CONCLUSIONS, VIEWS OR OPINIONS EXPRESSED REPRESENT THE CURRENT VIEW AND THINKING OF 500 GLOBAL WITH REGARD TO THE SUBJECT MATTER THEREIN BASED ON INTERNAL DATA AGGREGATED ACROSS ALL 500 GLOBAL FUNDS AS OF 6/30/21 AND/OR ANALYSIS WHICH HAS NOT BEEN INDEPENDENTLY VERIFIED, AND WHICH IS SUBJECT TO CHANGE AT ANY TIME. 
UNDER NO CIRCUMSTANCES SHOULD ANY OF THE ABOVE CONTENT BE CONSTRUED AS LEGAL, TAX OR INVESTMENT ADVICE FROM 500 GLOBAL OR ANY OF ITS AFFILIATES. 500 GLOBAL DOES NOT GUARANTEE ANY FUTURE RESULTS FOR ANY DECISIONS MADE BASED IN WHOLE OR IN PART ON THE CONTENT OR INFORMATION CONTAINED HEREIN. ALL READERS OF THIS POST SHOULD CONSULT WITH THEIR OWN COUNSEL, ACCOUNTANT OR OTHER PROFESSIONAL ADVISORS BEFORE TAKING ANY ACTION IN CONNECTION WITH THIS POST.
UNDER NO CIRCUMSTANCES SHOULD ANY INFORMATION OR CONTENT IN THIS POST, BE CONSIDERED AS AN OFFER TO SELL OR SOLICITATION OF INTEREST TO PURCHASE ANY SECURITIES ADVISED BY 500 GLOBAL OR ANY OF ITS AFFILIATES OR REPRESENTATIVES. FURTHER, NO CONTENT OR INFORMATION CONTAINED IN THIS POST IS OR IS INTENDED AS AN OFFER TO PROVIDE ANY INVESTMENT ADVISORY SERVICE OR FINANCIAL ADVICE BY 500 GLOBAL. UNDER NO CIRCUMSTANCES SHOULD ANYTHING HEREIN BE CONSTRUED AS FUND MARKETING MATERIALS BY PROSPECTIVE INVESTORS CONSIDERING AN INVESTMENT INTO ANY 500 GLOBAL INVESTMENT FUND. UNDER NO CIRCUMSTANCES SHOULD ANY CONTENT BE INTERPRETED AS TESTIMONIALS OR ENDORSEMENT OF THE INVESTMENT PERFORMANCE OF ANY 500 GLOBAL FUND BY A PROSPECTIVE INVESTOR CONSIDERING AN INVESTMENT INTO ANY 500 GLOBAL FUND. 
ASSETS UNDER MANAGEMENT ARE AS OF 30 JUNE 2021 AND ARE CALCULATED IN ACCORDANCE WITH SEC FORM ADV PART 1A INSTRUCTION 5.B. TO INCLUDE THE CURRENT MARKET VALUE (OR FAIR VALUE) OF ALL PRIVATE FUND ASSETS AND THE CONTRACTUAL AMOUNT OF ANY UNCALLED COMMITMENTS TO SUCH PRIVATE FUNDS, TOGETHER WITH THE CURRENT MARKET VALUE OF ALL OTHER SECURITIES PORTFOLIOS FOR WHICH 500 STARTUPS MANAGEMENT COMPANY, L.L.C OR ITS AFFILIATES PROVIDES ONGOING DISCRETIONARY INVESTMENT MANAGEMENT SERVICES, WITH MARKET VALUE DETERMINED USING THE SAME METHOD USED TO REPORT ACCOUNT VALUES TO CLIENTS OR TO CALCULATE FEES FOR INVESTMENT ADVISORY SERVICES. ASSETS UNDER MANAGEMENT MAY INCREASE OR DECREASE SIGNIFICANTLY AFTER 30 JUNE 2021.
COMPANIES VALUED IN EXCESS OF $100M ARE A SELECT SAMPLING OF INVESTMENTS ACROSS 500 GLOBAL’S FAMILY OF FUNDS. ALL VALUATIONS RELATE TO SELECTED PORTFOLIO COMPANIES AND ARE ESTIMATED IN ACCORDANCE WITH 500 GLOBAL’S VALUATION POLICY, AND ARE SUBJECT TO CHANGE. PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RETURNS.
QUARTILE RANKINGS DATA REFERENCED HEREIN IS SOLELY WITH RESPECT TO 500 STARTUPS, L.P. (THE “FUND”) AS OF MARCH 31, 2021. SUCH DATA IS PROVIDED “AS IS” BY CAMBRIDGE ASSOCIATES AT NO COST TO 500 GLOBAL. RANKINGS OR SIMILAR GROUPINGS HAVE INHERENT LIMITATIONS AND QUALIFICATIONS, SUCH AS LIMITED SAMPLE SIZE, IMPERFECT ACCESS TO INFORMATION AND OTHER CONSIDERATIONS. PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RETURNS. 500 GLOBAL CALCULATES NET TVPI AS FOLLOWS: (A)(I) NET ASSET VALUE OF THE FUND NET OF FEES, EXPENSES AND CARRY, CALCULATED USING VALUATIONS THAT WERE MARKED UP OR DOWN BASED ON EXITS, CLOSURES, SUBSEQUENT FINANCINGS AND DISCRETIONARY ESTIMATES OF MARKET VALUE (THE “NAV”) AND DILUTION PLUS (II) CASH OR CASH EQUIVALENTS HELD BY THE FUND PLUS (III) DISTRIBUTIONS TO FUND INVESTORS MINUS (IV) LIABILITIES OF THE FUND, DIVIDED BY (B) CONTRIBUTED CAPITAL OF THE LIMITED PARTNERS, IN EACH CASE, AS OF JUNE 30, 2021.

Christine Tsai

Founding Partner and CEO

Christine Tsai is the CEO and Founding Partner of 500 Global. Since the firm’s inception in 2010, she has led the growth of 500 to over $1.8B in AUM, 2,500+ portfolio companies, and a vibrant community of founders spanning 77 countries. The 500 global portfolio includes companies such as Talkdesk, Canva, Grab, Bukalapak, Lucidchart, Intercom, Gitlab, Credit Karma (acq’d by Intuit), Twilio (TWLO), TheRealReal (REAL), and SendGrid (SEND). Christine has spent her entire professional career building and investing in Silicon Valley. From 2003 to 2010, Christine held product marketing and operating roles at Google, including monetization and developer products such as Google AdSense, Google Analytics, YouTube APIs and syndication, and Google Developer Platform Tools. Christine holds a B.A. in Cognitive Science from the University of California at Berkeley.

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