500 Startups taps Partner Arjun Arora to lead its fundraising efforts

The collective fundraising effort of 500 Startups has a new lead partner.

The seed-stage investor named Arjun Arora to handle investor relations and head up fundraising, the organization told VCJ.

500 Startups, which launched in 2010, is raising its fourth main fund, which is targeted at $150 million and has already raised $49.6 million from 14 LPs, according to the most recent regulatory filing last fall.

Arora says he expects to wrap up Fund IV early this year. Fund III closed with $85 million in commitments when it wrapped up in 2015.

500 Startups also has announced more than a dozen microfunds, seven of which have held first closes and are up and running. These include geographic funds focused on Latin America, Southeast Asia, Japan, South Korea, Thailand, Turkey and its mobile collective microfund.

The Latin American and Southeast Asian vehicles are each on their second funds.

“The priority right now is to wrap up the global fund,” Arora said.

Arora joined 500 Startups in early 2016 to work on its seed program. He had been investing in and advising startups for the past five years and was the co-founder and former chairman and chief executive of ad-tech company ReTargeter.

Before that, he handled business development and strategy for Yahoo Real Estate.

500 Startups said co-founder Dave McClure and others from the organization will remain involved in fundraising, although Arora is leaving the seed program to fully head the organization’s fundraising efforts.

McClure said the move to make Arora head of fundraising came as the organization has grown and has fielded more LP interest from institutionalized funds, such as university endowments and foundations.

Arora said he has known McClure for about 10 years and invested as an LP in 500 Startups’ initial $30 million fund in 2010.

Although 2016 was a robust year for U.S.-based fundraising, with more than $40 billion raised by LPs, Arora said that demand from the investment community is high and that the 500 Startups brand name is strong, coming off the IPO of portfolio company Twilio last year.

Another company currently in its portfolio is Credit Karma, which operates a financial-management platform and provides free credit scores to consumers. It joined the unicorn club — valuations $1 billion and above — in 2014 and is currently valued at $3.5 billion, according to CB Insights.

500 Startups is also an early investor in cloud-communications platform company SendGrid, which has raised more than $80 million from investors and has been discussing its IPO plans since last year.

McClure said he expects 500 Startups to realize these and more exits in 2017.

Asked whether 500 Startups would consider raising an opportunity or growth fund to maintain pro-rata rights, McClure declined to discuss. But he noted that the firm has expanded to more than 140 employees and “has grown a lot in the last two years.”

“We’re confident about our progress,” McClure said.

Action Item: For more info about 500 Startups, visit the website at http://500.co/

Arjun Arora, a partner at 500 Startups. Photo courtesy of the firm.