Seed-stage startups focused on business-to-business have another source of capital to go after. Monta Vista Capital secured $48 million in capital commitments for its third fund — its largest to date — to support B2B startups.
The Silicon Valley firm was founded by Venktesh Shukla, who started investing at the angel stage as part of entrepreneurship group TiE Silicon Valley, also serving as a former president. He is the current chair of TiE Global.
Shukla and his group of partners, including Roger Krakoff, general partner, have expertise in the areas of AI, cloud, security and data. They take a team approach to investing and often do so at the pre-revenue stage. Monta Vista targets startups in infrastructure, vertical SaaS and digital transformation of industries, like mining and textiles.
“We have these deep, deep domain experts that we rely on for diligence and for the judgment call before we make the investment,” Shukla told TechCrunch. “And, unlike most of the seed funds, which typically have a one-person operation fund of this size, we believe that investing is a team sport. We collectively make a decision so we have the agility of a small fund, but all the resources of a very big fund.”
Also setting Monta Vista apart is that the firm doesn’t raise capital from institutional investors, but rather leverages a large network of 65 individual investors. Shukla calls the network the firm’s “secret superpower,” and that this network gives the firm its deal flow, diligence and portfolio company support. Monta Vista has now raised $72.8 million across the three funds.
Though the third fund is $48 million, securing some of that capital is somewhat exclusive. Monta Vista made only 12 investments from its second fund and plans to invest in 15 companies with the third fund. That said, the firm will put in around $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. Another is Nyansa, a company doing mobility performance management of enterprise wireless networks, was acquired by VMWare in 2020.
“It’s been a fun experience,” Shukla said. “Even with all the doom-and-gloom going on, the innovation train does not stop. Whether it’s good times or bad times, the good entrepreneurs have very compelling ideas, and that’s our goal — to find those compelling ideas.”