- Kapor Capital’s Fund III is their largest to date and one of the few Black-led, nine-figure funds in the venture world.
- The fund will invest in early-stage companies raising pre-seed, seed and Series A.
- So far, more than half of the investments have gone to companies with at least one Black founder.
Kapor Capital, an impact-focused venture capital firm, has raised a $126 million Fund III — the firm’s largest to date. This is the first time Kapor has raised outside capital as previous funds came from the firm’s founders, Mitch Kapor and Freada Kapor Klein.
Fund III, led by co-managing partners Ulili Onovakpuri and Brian Dixon, is one of the few Black-led, nine-figure funds in the venture world.
“To have examples of people who look like you raising capital and venture capital is so important,” Dixon told The Plug. “Finding a Black-led fund over $100 million 10 years ago just didn’t exist.”
Dixon and Onovakpuri set out to raise this large of a fund because their goal is to be able to lead the rounds in which they invested in order to have more impact with the portfolio companies. They are focused on early-stage companies raising pre-seed, seed and Series A.
The average checks range from $250,000 for pre-seed to $3 million for Series A. Kapor Capital is aiming to make 51 deals with Fund III, including international and follow-on investments. They have already invested in 15 companies.
“We’re really looking to see who benefits as a result of the product or service that the company is building,” Onovakpuri told The Plug about the companies Kapor Capital is looking to support. “We are excited about companies who are building products and services that disproportionately affect low-income communities, communities of color.”
Three of the companies in the Fund III portfolio are Cayaba Care, a maternity support platform; Daylight, a digital banking platform designed for the LGBT+ community by the LGBT+ community; and TomoCredit, a credit card for people looking to build their credit score.
Underrepresented founders are sorely underfunded in venture capital, particularly Black founders, Crunchbase found. As of June this year, only 1.2 percent of venture dollars went to Black founders.
So far, more than half of the investments have gone to companies with at least one Black founder and 100% of investments have a founder who identifies as an underrepresented person of color, according to a release from Kapor Capital.
But Dixon and Onovakpuri note that the fund does not invest only in diverse companies. They do, however, urge their founders to sign Kapor Capital’s Founders’ Commitment to building a diverse workforce.
“[It] is a commitment from the top and from the early days, when it’s two or three people to think about this versus when it’s 100, 1,000, 10,000 people,” Dixon explained.
Dixon and Onovakpuri started raising Fund III in 2021, though their work together goes back a decade. Onovakpuri, who began working in venture capital in 2010, started a summer associate program at Kapor Capital to help people with no VC experience get into the industry. Dixon was their first intern.
“As you see, it turned out really well,” Onovakpuri said.
She hopes that Fund III will also bring people to venture capital that would not have envisioned themselves in the field before.
“I think anytime you can go public with accomplishments such as this, part of me is hoping to inspire folks,” Onovakpuri explained. “I think representation matters.”