The Bhutanese Leading the way.
The government in February 2025 during the launch of its 21st Century Economic Roadmap said that a USD 100 million (mn) Venture Capital (VC) Fund would be set up.
The discussions on this have now reached an advanced stage with the government identifying a California based VC company 500 Global.
The legal documents between the government and 500 Global has been largely agreed to except for a few lines here and there.
The 500 Global company came through due to the Bhutan Innovation Forum (BIF) dialogue where Khailee Ng a Managing Partner of 500 Global was an attendee.
500 Global is a silicon valley based VC with USD 2.3 bn of assets under management. It is invested in 2,187 companies across the world. The company says it is investing in globally ambitious founders building fast-growing technology companies.
“We focus on the U.S. and global markets where innovation, capital, and ecosystems can propel startups and unlock long-term value,” says the company website.
It has backed 3,000 plus startups. Notable companies 500 Global invested in include Eat App, IDreamBooks, Little Eye Labs, myGengo, Cypheme, Cucumbertown, Visual.ly, Canva, Convoz, Udemy, RidePal and Aircall.
The company works closely with key stakeholders and advises governments on how best to support entrepreneurial ecosystems and economic development in emerging markets. 500 Global has backed over 5,000 founders representing more than 3,000 companies operating in more than 80 countries. They have invested in more than 35 companies valued at over USD 1 billion and around 150 companies valued at over USD 100 million (including private, public, and exited companies).
Their 175 team members are located in more than 25 countries and bring experience as entrepreneurs, investors, and operators from some of the world’s leading technology companies.
Under the arrangement 500 Global will raise USD 50 mn and the Bhutanese government will come up with the balance USD 50 mn with a total of USD 100 mn to be managed by 500 Global.
The company as a VC will then invest in and support, mentor and guide startups in Bhutan to be successful not only nationally, but to also go international.
The VC will have a profit sharing mechanism with the start ups its supports and mentors.
In return for the government’s USD 50 mn apart from a 2 to 3% management fee by the VC the VC will have to give back all of the USD 50 mn fund to the government after 10 years with 80% of the profits.
To test the waters, the fund will not raise USD 100 mn in one go but will do a first round of funding of USD 50 mn, see the response and then go for a second round of USD 50 mn.
The fund will open up Nu 8.7 bn of funding for startups in Bhutan which will not be limiting and stringent like bank loans.
Background
The fund is aimed at fostering entrepreneurship, innovation, and economic growth. The program is designed to provide structured funding and capacity-building support for startups and small to medium enterprises (SMEs), with a focus on high-potential sectors, such as technology, manufacturing, and green energy.
The government will play a facilitative and oversight role, working closely with the (VC) firm to manage operations, ensure transparency, and maintain regulatory compliance.
The initiative aims to support Bhutanese entrepreneurs, including those expanding into global markets. While detailed eligibility criteria are still being developed, the fund is expected to support startups, SMEs, and high-growth businesses with scalable and innovative models.
Applications will be assessed based on key factors such as business viability, scalability, market potential, innovation, and financial sustainability. The selection process will be refined during the implementation phase by the VC firm.
The initiative will primarily focus on equity-based investments, though other financial instruments, such as low-interest loans and grants, may also be explored. The funding amount for each startup will vary depending on the business stage and investment needs, with limits to be determined within the fund’s governance structure.
Beyond financial assistance, the program will offer non-financial support, including mentorship, accelerator programs, and business development services. These resources aim to enhance the success rate of funded businesses and ensure their long-term sustainability.
