Business-to-business-focused seed-stage startups have another source of capital to pursue. Capital of Monta Vista secured $48 million in capital commitments for its third fund – its largest to date – to support B2B startups.
The Silicon Valley company was founded by Venktesh Shukla, who started investing at the angel stage as part of the entrepreneurship group TiE Silicon Valley, also serving as its former president. He is the current chair of TiE Global.
Shukla and his team of partners, including Roger Krakoff, general partner, have expertise in the areas of AI, cloud, security and data. They develop a team approach to investment and often do so at the pre-revenue stage. Monta Vista targets startups in infrastructure, vertical SaaS and digital transformation industries, such as mining and textiles.
“We have these deep, deep domain experts that we trust for due diligence and for the judgment call before we make the investment,” Shukla told TechCrunch. “And, unlike most seed funds, which usually have one person operating funds of this size, we believe that investing is a team sport. We work together to make a decision so that we have the agility of a small fund, but all the resources of a very large fund.
What also distinguishes Monta Vista is that the company does not raise capital from institutional investors, but takes advantage of a large network of 65 individual investors. Shukla calls the network the company’s “hidden superpower,” and this network provides the company with deal flow, diligence and portfolio support. Monta Vista has now raised $72.8 million in three funds.
Although the third fund is $48 million, securing some capital is relatively exclusive. Monta Vista made only 12 investments from its second fund and plans to invest in 15 companies with its third fund. As such, the company will put about $1 million to $2 million into each company, Shukla said. This year, Monta Vista is on track to invest in about five companies.
Previous investments include marketing tech company Captiv8, customs clearance company KlearNow and Eridan, a mobile infrastructure company.
Monta Vista also had some successes from its earlier funds, including API security company Cequence Security, which raised a Series C in 2021, and Tekion, an automotive retail platform that announced a $250 million Series D, also in 2021. The other is Nyansa, a company that makes mobility management of business wireless networks, acquired by VMWare in 2020.
“It was a fun experience,” Shukla said. “Even with all the doom-and-gloom going on, the innovation train doesn’t stop. Whether times are good or bad, great entrepreneurs have compelling ideas, and that’s our goal – to find compelling ones. ideas.