Despite the exponential growth of the venture capital industry in emerging markets in recent years, the amount of investment allocated to the category by institutional investors has not varied in the same proportion. This is mostly due to the fact that most VC funds raised by new managers are small (i.e. under $50 million under management), very diverse in their composition and strategy, and generally do not have an adequate investment track record. All of this reduces the investment possibilities for large equity managers, despite the talent and execution capabilities of these new managers.
This is the main reason why Seedstars officially announced the launch of its investment platform Seedstars Capital: to promote VC and seed fund managers in emerging markets. The platform was launched with support of xMultiplied, an investment holding company based in Switzerland.
Seedstars Capital aims to partner with managers with unique strategies and extensive local expertise in emerging markets, and makes available the resources and infrastructure needed to launch and develop new investment funds. At the same time, Seedstars acts as the catalyst to raise institutional funds by offering investors diversified and efficient investment vehicles for emerging markets.
Seedstars is fully committed to the realization of the UN Sustainable Development Goals (SDGs) and integrates ESG and impact considerations into its manager selection process to drive positive change. Through the funds on the platform, Seedstars expects to invest in 500 companies to create more than 10,000 new jobs and generate more than $20 billion of additional GDP across emerging markets over the next 10 years. This news come just a few months after Seedstars launched its second emerging market seed stage fund.
“We believe the venture capital industry needs to be more open and inclusive and we find highly talented managers across emerging markets. Unfortunately, most lack the scale and resources to attract institutional limited partners and depend on local funding to deploy their strategies and create the impact they long for. For limited partners,, the growing number of new managers makes it difficult to identify the best performing and most impactful strategies. By pooling their assets and bringing them under our community, we can accelerate the growth of rising managers while offering limited partners the visibility and investment vehicles they need to increase their allocation to the asset class.”Benjamin Langer, Partner of Seedstars Capital
Moreover, Seedstars is working to launch funds focused on edtech, supply chain, climate tech and other emerging market impact sectors with prominent up-and-coming managers in the near future. Seedstars aims to promote new venture capital managers focused on pre-seed to active Series A stage technology-based companies across all emerging markets.
“We partnered with Seedstars given our common vision of creating wealth with positive impact across emerging markets. Providing outstanding new and diverse managers the possibility to execute on their strategies will fuel economic growth while achieving market investment returns”.Vivek Chandaria, Managing Partner at xMultiplied