Early-stage VC Z21 Ventures planning $40 million second fund

Early-stage investment firm Z21 Ventures, which backs startups in India as well as those started by Indian-origin founders in the US, has fully deployed its first $5-million fund, and is planning to launch a second fund of $40 million, said one of its founders.

The California-based investment firm operates as a collective of Indian-origin technology executives in the US, who are limited partners (LPs), or sponsors of the fund. These include executives at firms such as Innovaccer and Nutanix, in addition to tech giants like Google, Cisco, Apple, Amazon and Meta.

Z21 Ventures was set up in 2022 by Abhinav Shashank, cofounder and CEO of healthcare focused software-as-a-service (SaaS) unicorn Innovaccer, and Raj Shekhar Singh, a former senior executive at Innovaccer.


“We’re a community fund focused on the India-US corridor. The idea was to invest small amounts of around $100,000 to $150,000 in startups operating in the enterprise, software and hardware areas, and also provide them with the opportunity to work with operators, who have been in these areas before,” Singh, who is a general partner, told ET.

Z21 Ventures will focus on investing in enterprise software startups as well as those in the hardware space.

“We’re starting fund-II and the target is $40 million… We’re in the process of raising that fund and we’ll start deployment soon. In fund-II, we’ll have a few institutional investors as well, because only with individuals you can’t raise that much money but the approach remains the same,” Singh said, adding that the firm will continue investing in the seed stages of startups, but will also look at participating in follow-on rounds of its portfolio companies.

Jyotika Gupta, cofounder and partner at Z21 Ventures, said that with the second fund, the firm will also be looking to increase the cheque size to $0.5-1 million.

“The idea with the first fund was to test the hypothesis of the operator-led VC model… We’ve gotten good feedback from both our LPs and founders. Now, we want to scale this model,” she said.

Z21 Ventures has backed 27 startups through its maiden fund, and aims to invest in as many through the second one. Its current portfolio companies include Fireside Ventures-backed medical device startup Inito, Peak XV Partners-backed artificial intelligence software firm Truefoundry, and Y Combinator-backed restaurant operations management software firm Explorex.

“Our focus is on enterprise SaaS because that’s where our expertise lies. But we also invest in startups that have IP (intellectual property)-driven hardware,” Singh said, adding that IP-driven hardware is a third of the company’s portfolio.

He said, “Around $10 million, or one-fourth of the second fund, will come from community leaders, and we’ll have a 100 people join (as LPs). The remaining $30 million will come from institutional investors… But even within that segment, we’re trying to create a community of investors who will take on our larger rounds,” Singh said.