500 Startups Launches $17m Fund Focused on Spanish-Speaking Latin America

With the launch of Luchadores III, 500 Startups plans to focus on very early stage companies and offer possible follow-on investments.

500 Startups arrived in Latin America in 2011 and has since made 240 investments in early-stage companies in the region.
By Marcella McCarthy (EN)
September 08, 2021 | 07:00 AM
Reading time: 1 min.

Miami — By Marcella McCarthy

Today, 500 Startups, the world renowned accelerator and venture capital firm, announced the launch of 500 Luchadores III, a $17 million Latin American fund where they plan to invest in 130 early stage companies over the next 2.5 years.

“Our thesis is to invest really early and we’re agnostic to industry,” said Santiago Zavala, a partner at 500 Startups.

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The firm plans to focus this fund on Spanish-speaking Latin America, as they already have other funds dedicated to Brazil.

Previous Luchadores funds have been smaller in value and haven’t included any follow-on investment capabilities, but with Luchadores III the firm has a three-step approach set up.

“Now we’re adding a follow-on strategy. It speaks to the volume of the ecosystem and that the model is working,” Zavala told Bloomberg Línea.

The first check will be in the range of $50,000 - $100,000, with possible follow-on from the same fund ranging from $250,000 - $500,000, and then possible investment from the global fund which would fund from $3 - 5 million.

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The fund has already invested in 44 companies thus far, and Zavala said there’s a heightened focus on mental health startups, which have flourished during the pandemic as more and more people are experiencing anxiety and depression.

One of those companies is YANA (which stands for “you are not alone”) out of Mexico and counts about 5 million users already. The chatbot app launched in 2019 and garnered attention when Apple and Google named them a top app in 2020.

Another one is Terapify which offers online therapy and is also based in Mexico, and finally there’s Pura Mente, out of Argentina, which offers meditation and mindfulness sessions through an app.

500 Startups came to Latin America in 2011, and by 2013 they had established their first Luchadores fund. In 2016, they launched their second.

“Latin America has been part of our global strategy for almost a decade, and this third fund is a sign of our ongoing commitment to the region at a time when it is increasingly attracting interest from international investors,” said Christine Tsai, CEO and Founding Partner of 500 Startups.