500 Global’s playbook in a bear market

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Hello reader,

Suddenly, the R-word was everywhere. As a child, I found it difficult to hide the enormous stress caused by financial strain in my family. I always felt the pressure to be prepared for the worst outcomes.

However, my parents dealt with it beautifully. They’d have long conversations about what it means to work longer hours and the ways in which the quality of our lives may take a hit from a potential recession.

I found these conversations comforting since we were mentally prepared for tough times ahead.

Our big story of the day might do just that for you. My colleague Collin will take you through a motivational talk with one of the big guns at 500 Global to give you a sense of what VCs today are focusing on in Southeast Asia’s startup ecosystem as it weathers a market downturn.

Today we look at:

• 500 Global’s investment plans in a bear market
• Latest updates on Zipmex’s liquidity situation
• Other newsy highlights such as Jack Ma’s potential exit from Ant Group and layoffs at an Australian Web3 game studio.

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Not all doom and gloom

Image credit: Timmy Loen

Amid the challenges faced by startups around the world, 500 Global managing partner Vishal Harnal says that the firms that are finding it hard raising capital tend to have the loudest voices. Despite the woes, he says that there is still a lot of fundraising activity happening in the background, though he admits that the process to raise capital is “taking longer” for startups.

He talks to Tech in Asia about how the recession has affected the Southeast Asian startup ecosystem and how 500 Global plans to invest in the region.

• Survival of the fittest Harnal points out that many of today’s big-name tech firms – including Uber, Airbnb, and WhatsApp – were established during periods of economic downturn. He adds that the variety of industries where these companies came from also shows that there isn’t a specific sector that fares better or worse in terms of fundraising during recessions.
• What really happens in a downturn However, Harnal notes that during these periods, capital is more likely to focus on market-dominant companies, and investors are less willing to fund newer players because of their reduced competitiveness. He adds that established companies and late-stage startups are also more conservative with their budgets during downturns.
• Upcoming bets in SEA 500 Global uses a “thesis-driven sectoral approach” with their investments, focusing on companies that build solutions for rural digitalization, fintech for financial inclusion, all-commerce ecosystem, sustainable cities, healthcare, human and machine productivity, the creator economy, and Web3.

Read more: Recession Run: 500 Global’s investment plan in SEA

The Zipmex saga

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