500 Startups Put Its India Funding On Hold Because Of Tax Issues

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India’s recent demonetization saga has ripple effects in more than just the common man standing in long queues at ATMs and in front of banks. A spokesperson from Silicon Valley based 500 Startups told Economic Times that because of the recent moves of the Indian government regarding tax and the regulatory environment, the company has put a temporary hold on to its India funds till the time they get more clarity regarding the new policies.

500 Startups planned to raise a $25 million fund named Kulfi, to fund startups mainly in India and in the countries of Sri Lanka and Bangladesh. The company which is known to be one of the most reputed investors in Silicon Valley, saw the exit of key executive like Pankaj Jain who was leading the Kulfi fund and Soaib Grewal who was managing the India investments for the company.

While the funding has been put on hold, 500 Startups still aims at investing actively in Indian startups in 2017. Globally, the company has already invested in almost 1,000 startups in more than 50 countries since 2010. Successful Indian ventures that were backed by 500 Startups are ZipDial which was bought by Twitter and Little Eye Labs which was sold to Facebook.

Some ventures that were shut down were Cucumbertown, Tushky and Seat14A.com. India’s market is ripe of startups and 500 startups sees this as an opportunity to encourage the new ventures by funding their ideas. The company sees future investments in India as well and it already eyeing a couple of ventures in India that it may fund in 2017.

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