500 Startups launches $25m fintech fund
24 February 2016 | 9429 views | 2
Early-stage venture firm 500 Startups is launching a $25 million fintech fund focussed on investing in startups building "financial services for the rest of us".
Founded by "super angel" investor Dave McClure, 500 Startups has already pumped money into several fintech outfits, including Simple, CreditKarma and iMoney.
Sheel Mohnot, who will run the new fintech fund, says that 500 Startups' work in the field has led it to conclude that traditional financial institutions are still not serving millennials, minorities, women, and emerging markets effectively.
He also says that the incumbents are not innovating fast enough and that technology, specifically smartphones, will slash the cost of delivering financial services to billions of underserved people and businesses.
But startups face big challenges because of the regulatory burdens in financial services, the importance of customer relationships and need for marketing and distribution.
500 Startups is vowing to help meet these challenges not only with a dedicated fund but accelerator and corporate partner programmes. The fund aims to invest in around 100 firms around the world, working in areas including lending, investment advice, PFM, blockchain, money movement, and insurance.
Meanwhile around 20 firms a year will work with the accelerator in the San Francisco Bay Area and the partner programme will link startups to established players in the FS and technology industries.