According to a Bloomberg report, citing data from Pitchbook, at a time when the value of venture investments has hit a four-year low and investors funnelled their money into AI firms in 2023, leaving companies in other sectors to struggle, an early-stage VC firm from New York, Exponent Founders Capital, has launched a new $75 million fund. The firm emerged from stealth along with the launch of the Fund II. Back in 2021, it raised $50 million for its first fund.
The fund was oversubscribed primarily by nonprofit endowments and hospitals, with limited partners, including Carnegie Mellon University, Cook Children’s Health Care System, LGT Capital Partners, Next Legacy Partners, and others.
Fund II’s investment strategy
Exponent Founders Capital’s Fund II will be deployed across promising inception and early-stage companies spanning enterprise software, fintech, and payments, infrastructure, applied AI, and vertical SaaS. It will focus on backing startups in the US, Canada, and Europe.
The check size will range from $500,000 to $5 million. The firm aims for a minimum of 5% to 10% ownership in the companies in which it backs.
Brainchild of ex-Ramp, Robinhood execs
Exponent Founders Capital was co-founded in 2021 by Charley Ma and Mahdi Raza to scale their impact as generalists, thesis-driven, and long-term investors motivated to help startup teams cross the growth chasm from $0 to over $100M and beyond in revenue.
Ma was one of the first business hires at Plaid where he led the fintech and developer sales vertical in San Francisco and helped build the company’s New York office. Later, he was one of the first business hires at Ramp and helped launch its corporate card. After his stunt at Ramp, Ma served at Alloy and JPMorgan.
Raza became an operator after roles in fintech and technology investment banking at Evercore and investing at GIC. He worked in growth and payments at Robinhood before joining Stytch.
Fund I’s portfolio
Exponent Founders Capital’s Fund I invested in nearly 40 startups reportedly, including Apollo.io’s $100 million round at a $1.6 billion valuation, Chronosphere’s $115 million round at a $1.6 billion valuation, and EvenUp’s $50.5 million round. The firm has already had some exits, including software startup Tactic, which was sold to TaxBit.
“It’s difficult to build an enduring company unless you’ve lived it,” said Charley Ma, cofounder of Exponent. “We have years of earned experience from the zero to one hundred journeys at multiple high-growth companies, and we strive to be pound for pound the most high-leverage investors for our founders.”
“Charley and I are eager to back non-consensus founders at the earliest stages and help them navigate the journey to be tomorrow’s category leaders,” said Mahdi Raza, cofounder of Exponent.
