Ubiquity Ventures Secures $75 Million for Third Fund
Despite the venture capital market still trying to sort itself out, venture capital firms remain optimistic about closing new funds. The latest firm to secure a significant amount of capital commitments is Ubiquity Ventures, which has raised another $75 million in capital commitments for its third fund.
A Solo General Partner with a Track Record of Success
Sunil Nagaraj is the solo general partner at Ubiquity, having started the firm in 2017 and closed his debut fund of $30 million in 2018. He then raised $51 million in 2020 for Fund II. Nagaraj’s experience and success as a venture capitalist can be attributed to his ability to identify innovative startups with high growth potential.
The Power of Being Nerdy and Early
Nagaraj, who was previously with Bessemer Venture Partners for six years, attributes his success to being "nerdy and early." He explains that this mindset led him to invest in Auth0 in 2014, a company that eventually exited in a $5.6 billion deal to Okta. Nagaraj’s experience at Bessemer Venture Partners also gave him the opportunity to work with startups from various industries, including software as a service (SaaS), deep tech, and moonshots.
A Delicate Balance between Mainstream SaaS, Deep Tech, and Moonshots
Nagaraj emphasizes the importance of striking a balance between mainstream SaaS, deep tech, and off-the-deep-end moonshots. He believes that investing in startups from these different categories can be beneficial, but it’s essential to have a clear understanding of each category’s potential for growth.
"The danger is that once you do something outside the norm, you can go too far off the norm," Nagaraj said. "You need to find that sweet spot where you’re not just investing in something new and exciting, but also something that has real potential for return on investment."
Focusing on Early-Stage Startups
Nagaraj focuses on early-stage startups creating ‘software beyond the screen,’ which he describes as the trend of having no screens. This means using software to navigate, perceive, understand, and control the real physical world. In other words, it can become "ubiquitous."
"This is something I would love for the whole tech community to embrace more of," Nagaraj told TechCrunch. "It’s the biggest idea that’s not being exploited right now."
Investments in Ubiquity University
Nagaraj has already made four investments from the new fund and plans to make about 20 overall, writing about $1 to $2 million for a seed round and reserving the same for the subsequent Series A. He takes a board seat, which he joked that many of his peers find odd at the seed stage.
In addition to investing in startups, Nagaraj has also created Ubiquity University, a series of educational videos for seed-stage entrepreneurs. These videos cover topics such as how to set up your first board meeting, build a cap table, and create a financial model.
The Importance of Education for Seed-Stage Entrepreneurs
Nagaraj emphasizes the importance of education for seed-stage entrepreneurs. He believes that many startups struggle with the basics, such as building a strong team, creating a solid business plan, and managing finances.
"I’ve done about half of them myself," Nagaraj said. "I’m continuing to add to this as a free resource for the world. It’s based on some of my pet peeves – entrepreneurs have been pitching like 100 times with different VCs. So what do they do at the first meeting? Pitch. You already have my money, you don’t need to sell me anymore."
The Global Venture Capital Market: A Delicate Balance
The global venture capital market is still trying to sort itself out, but Nagaraj’s success and experience demonstrate that there are opportunities for growth and return on investment. By striking a balance between mainstream SaaS, deep tech, and moonshots, investing in early-stage startups, and providing education and resources to entrepreneurs, investors can navigate the complex venture capital market with confidence.