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A micro VC firm in Sacramento raises a fast second fund

TechCrunch TechCrunch 2/06/2016 Connie Loizos

There may be more VCs per capita in California than anywhere else in the world, but they aren’t paying much attention to what’s happening in and around the state’s capital of Sacramento.

That’s both good and bad for what may be the only early-stage venture firm in the area, Moneta Ventures. The outfit — which is technically in Folsom, outside of Sacramento — closed on a debut fund of $25 million early last year, and, like a lot of firms that are raising fast follow-up funds, it just held a first close of $25 million for a second fund.

(Its new fund is being left open through the end of the year or until it hits $30 million in capital commitments — whichever comes first.)

The good news is that Moneta doesn’t have lots of competition when it comes to funding interesting startups in the region. Among its regional bets is Kura MD, a healthcare commerce platform; game maker 5th Planet Games; and TeleMed2U, a telemedicine company that provides real-time access to physician specialists.

Indeed, healthcare startups are becoming especially prevalent in the Sacramento area, thanks to companies headquartered there like Anthem Blue Cross.

Additionally, Intel has a big presence in Sacramento, along with Oracle and Cisco, and all have seasoned executives who occasionally step away from Corporate America to do their own thing.

Still, as you might imagine, securing follow-on funding for portfolio companies in Sacramento isn’t always a walk in the park. Instead, it often requires a three-hour drive into the heart of Silicon Valley, which Moneta’s small team has been making more often lately.

“We’re close enough to where we go to a lot of Bay Area events when we can,” notes Sabya Das, an associate with the firm. “Being a new micro fund [that’s off the beaten path] isn’t easy, but we’re working on creating and fostering those connections, especially as our portfolio companies mature.”

Moneta has seemingly been lining up some meetings expressly for itself, too.

In addition to its Sacramento-region investments, Moneta’s bets include AppOrchid, a software developer specializing in AI that’s based in Redwood Shores, and MindTickle, a Sunnyvale-based software maker whose Series A round was led late last year by New Enterprise Associates.

Moneta was co-founded by Lokesh Sikaria and Vaibhav Nadgauda, who’d earlier co-founded Sparta Consulting, a firm that specialized in implementing SAP AG’s business software. It sold for $38 million in 2009 to the India-based company KPIT Cummins Infosystems. The duo has since brought aboard a senior associate, Eric Chu, who was formerly a consultant at Booz Allen Hamilton; and Das, who graduated from UC Berkeley last year.

The firm originally set out to fund companies with at least $500,000 in annual revenue. According to Das, it is now willing to write smaller checks to pre-revenue startups, as well as invest in companies that are further along and may have up to $10 million in annual revenue but have not yet raised outside capital.

As for the sectors it’s chasing, it’s likely that roughly 40 percent of its new fund will be allocated to enterprise startups. The rest, says Das, will likely be split between healthcare, digital tech and consumer startups.

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