A winning strategy
- The low interest rate environment of 2020 and 2021 saw large amounts of capital enter the ecosystem. Asia was ranked the top region for the number of VC deals, accounting for 36% of global deal share in 4Q2021, according to CB Insights.
- Rising inflation, a rapid surge in interest rates, geopolitical tensions and instability in the global banking system changed things in 2022.
- How has this impacted LP sentiments? Vishal Harnal, Managing Partner at 500 Global, shared that venture capital as an asset class is power law-driven, making it unsurprising that limited partners (LPs) will concentrate more capital on managers and funds in the top quartile that deliver an asymmetrically large amount of returns, especially now that venture in Southeast Asia has matured.
- 500 Global recently closed US$143M across its third early-stage fund and a growth-stage vehicle for Southeast Asia, which Vishal attributes to the firm’s track record of backing exceptional founders consistently across previous funds.
- “We now have six companies valued over US$1B, including our latest addition eFishery. Our LP base values that track record and understands the opportunities that the VC asset class presents across market cycles,” he shared.
- 500 Global manages risk by structural diversification. This means we invest across 30 sub-sectors, with an average of 100 companies per fund. According to Vishal, this increases our team’s chance of backing the largest outliers, earning 500 Global the reputation of being the firm that has backed many, if not the most, number of companies valued at US$1B.
- Read the full story on The Edge Singapore.