US-based seed fund and accelerator 500 Startups has closed an $85m fund that includes Japan-based corporates Dentsu and Yahoo Japan as limited partners, DowJones VentureWire reported on Friday.
Marketing firm Dentsu and internet company Yahoo Japan were joined by Malaysian state-backed firm Malaysia Venture Capital Management Berhad and a host of individual investors.
Founded in 2010, 500 Startups operates as a kind of index seed fund, investing about $100,000 as an initial investment before deciding to reinvest based on each startup’s subsequent progress. It has backed a total of about 1,200 companies, including Credit Karma, Intercom and Twilio.
The fund, which closed below 500 Startups’ $100m initial target, had raised $50m as of January 2015. It is the firm’s third, following a $29m fund in 2010 and a $44m fund closed two years later.
500 Startups co-founder Dave McClure told DowJones the shortfall in the third fund can be attributed to the relative lack of interest from institutional investors, which were reportedly put off by its rapid investment pace, small stakes and reliance on accelerator graduates.
Nevertheless, 500 Startups intends to begin raising two more funds, a person familiar with the plans told DowJones. One will be its fourth global fund while the other is set to be a growth-stage fund, and the firm is targeting $200m for each.