Array Ventures raises $ 56 million to support high-tech enterprise software – TechCrunch
Shruti Gandhi wants to dispel a misconception in first-check fundraising: Every founder doesn’t need his early stage investors to be a shoulder to him, he just needs his investor to understand his business in a way that others do not. Most of the entrepreneurs in her portfolio for Array Ventures, a fund she created five years ago to support businesses, are regular founders with nearly a decade of experience in the field.
“The things we invest in require a lot of industry experience and customer experience,” she said. “And you don’t get that back overnight when you drop out of college – the kinds of things we invest in aren’t something you imagine after a year of work experience. With franchise in mind, Gandhi has just landed tens of millions to invest in what she calls “the hard corporate space.”
Array Ventures’ new $ 56.1 million fund, which closed last week, plans to invest in 30 startups working on tech and lead enterprise technology. Since its first fund, Array Ventures has increased the size of its check from $ 150,000 to $ 1.2 million to $ 1.5 million. Gandhi said the company will now target a 15% stake in each of its trades, up from 10% compared to its second fund.
“While most companies claim to have invested in enterprise technology, their primary focus is on bottom-up SaaS companies, especially at the first-check stage,” Gandhi said. “Very few companies are actually technical enough to invest in core business technology for the new era of business.” That’s not to say that Array doesn’t support vertical SaaS products (it does), but it looks for companies with “highly differentiated” core fundamentals.
But what does this really mean? Gandhi puts it this way: Everything you see today on the front-end needs more robust support technology that can handle big data, do [users] more secure and migrate to the cloud. Array invests in startups working beyond the application layer, focusing on security, data and cloud infrastructure. Think Snowflake, Okta, Twilio, and Databricks, not Dropbox or Salesforce.
This new technology stack has enabled Array to invest money in startups working on issues such as automated threat detection and response, data orchestration, and licensed media discovery.
The impact of Gandhi’s focus strikes differently given that only 1.9% of venture capital investments go to female business founders, according to a Work-Bench report. More than a third of Array’s portfolio is headed by founders. The investor says her portfolio contrasts with some of the biases women in tech often receive.
“When a woman starts a business, people assume they’re going to start a consumer business – that’s the bias we have in the market,” she said. “And the same goes for me, who manages a corporate fund. “
While Gandhi’s less bustling niche may mean she can’t capture the flow of business from today’s top accelerators, the hard business community appears to be well connected. More than half of its portfolio founders have invested in all of its funds, including Peter Fishman of MozartData, Noam Ben-Zvi of Placer.ai, Analisa Goodin of Catch & Release and Madhu Mathihalli and Mohan Gummalam of Hermis.
Other sponsors of Array Ventures include Dan Wright of Data Robot, Elias Torres of Draft, Jaynti Kanani of Polygon, Vanderbilt University, MPowered Capital and NSV Wolf.