Emerging markets-focused venture investor Capria Ventures closed its first, $57 million fund in June 2020.
“It was a lousy time to raise and a great time to deploy,” Capria’s Will Poole told ImpactAlpha.
Now amid the venture slump and warnings of an economic recession, the firm is back in the market with a second fund for early-stage tech ventures. The firm is looking to raise $100 million to cut equity checks of $2 million to $3 million on average. It reached a first close of an undisclosed amount with backing from Gates Ventures, OIP Investment Trust, Crystal Springs Foundation, the Sall Family Foundation, the Brakeman Family Trust and others.
“The case for investing in the Global South is as strong or stronger than ever,” said Poole.
Poole shrugged off economic headwinds and debt and currency crises, noting that the IMF predicts that a third of global GDP growth this year will come from the Global South, not including of China.
“If you’re on the ground in these economies, you’re used to dealing with the vagaries of everything from the macro environment to currency devaluations. Some of these businesses are anti-cyclical,” he added.
Carpria has disclosed four investments from its second fund, including Egyptian fintech venture Paymob, Brazilian agtech startup Agrofy, Nigerian mobility startup MAX, and Mexican fintech startup Kueski.
AI and climate
Capria’s investment themes are evolving with its second fund: whereas “digitialization” was the hot tech trend for Capria’s first fund, because of the pandemic, climate and generative AI are key themes for Capria’s second fund.
One portfolio company in Asia is using AI-based chat services to engage with its farmer network; it has cut customer service costs by 35%, said Poole. A health tech company is using AI to simplify complex medical explanations for patients.
Capria looks for narrowly constrained AI applications and “guardrails,” explained Poole, who spent a dozen years at Microsoft.
“As a technologist in the world we live in, I have concerns about AI for sure,” he said. “For the domains in which we operate, of applied AI, I have many fewer concerns. Having more constrained domain utilization means we have much less risk of problems.”
Capria resists the term “impact investor,” but it often walks and talks like one. Its second fund is focused on companies that “contribute to the GDP dividend, use applied generative AI to create rather than destroy jobs, and find asset-light solutions that help mitigate the disproportionate impact of climate change,” a spokesperson told ImpactAlpha.
“We invest in impactful sectors and apply the best strategies in ESG,” said Poole. “We think that’s a profit-maximizing decision to do that.”
In fintech, Capria insists on board-adopted ethical lending practices in place before the firm invests.