Two-person Brooklyn firm raises $160M software fund in a month
What's the deal? Seva GrowthDealroom has a profile for this one. Try Dealroom →, a two-person Brooklyn-based investment firm, has raised $160 million for its second fund to back tech-enabled companies. The oversubscribed Seva GrowthDealroom has a profile for this one. Try Dealroom → Fund II nearly doubles the firm's 2023 debut pool, which closed at $85 million.
Why now? The firm raised the fund in roughly a month, kicking off in the second week of August and wrapping up before the second week of September, said founder and managing partner Shalin Mehta. "We don't have a placement agent," he said. "We don't even have an IR department."
Who's backing it? About 75% of commitments came from institutional investors, including university endowments, charitable foundations, and money managers acting for cause-based nonprofits. LPs include Washington, DC-based fund-of-funds investor Accolade PartnersDealroom has a profile for this one. Try Dealroom →, which committed to both funds, plus founders from SevaDealroom has a profile for this one. Try Dealroom →'s existing portfolio.
What's the endgame? The fund aims to make seven to nine minority preferred equity investments of $7 million to $20 million. Seva targets founder-led software, data services, marketplaces, and tech-enabled services companies with $3 million to $20 million in revenue.
How it's run: Mehta, 31, runs Seva as a solo managing partner from its Williamsburg office, working with a full-time principal on everything from sourcing to vetting deals. He previously spent five years at Susquehanna Growth EquityDealroom has a profile for this one. Try Dealroom → and two at Spectrum Equity. The firm plans four- to six-year holds, aiming to return three to five times invested capital.
The track record: The 2023 debut fund has made five investments, including Toronto's TitanFileDealroom has a profile for this one. Try Dealroom →, a secure file-sharing platform for law firms, and Serif HealthDealroom has a profile for this one. Try Dealroom →, a healthcare price data provider. Those companies are growing at an annualized 40% to 100% and are profitable, Mehta said, though he declined to share revenue or net asset value.
The signal: Not all software investors are rattled by the industry's AI reckoning. Mehta sees AI as an enabler for the software market rather than a disruptor, a thesis that this small shop is now putting $160 million behind.
Read more: pitchbook.com
Image credit: Vacacion
