South Loop Ventures, a venture firm based in Houston, recently announced the closing of their Fund I, totaling a whopping $21 million. Rice Management Company and Chevron Technology Ventures have come on board as anchor investors for this exciting venture. The firm, founded in 2022, is focused on supporting seed and pre-seed companies, offering an average check size of $400,000. One of their key priorities is to back founders from diverse backgrounds, particularly those of color.
Zach Ellis, the brains behind South Loop Ventures, shared his thoughts with TechCrunch regarding the finalization of the fund. He mentioned that the fund is open to investing in founders across the nation but has a soft spot for sectors that align with Houston’s industrial strength, such as healthcare, energy, space, and climate. Texas Capital Bank and The Great Commission Foundation of the Episcopal Diocese of Texas also joined the round of investors. With 13 investments already under their belt, South Loop aims to reach a total of at least 30 investments in the near future.
Ellis highlighted the importance of having a fund dedicated to supporting diverse founders in Houston, a city known for its rich diversity. As one of the most diverse cities in the nation, Houston provides a fertile ground for nurturing and empowering founders from all backgrounds. When asked about potential challenges due to the fund’s focus on founders of color, Ellis remained steadfast in his belief that everyone should have access to venture capital opportunities. He emphasized the unique value that underrepresented and diverse teams bring to the table, offering significant returns for investors.
Despite his strong ties to Houston now, Ellis originally hails from New Orleans and began his career in the military. His journey led him to the corporate sector, where he discovered his passion for using technology to enhance everyday life. His experience as a health care consultant and later as part of a corporate innovation group shaped his understanding of the power of technology in driving positive change. Ellis eventually found his way to the corporate venture team at PepsiCo, where he delved into technology scouting and investing in various sectors.
The onset of the pandemic and the tragic murder of George Floyd prompted Ellis to reflect on his career and the impact he could make in the world. Feeling the need to address the lack of diversity in the rooms he frequented, he decided to take action. A timely call from a friend in Houston opened up new possibilities for Ellis, leading him to establish South Loop Ventures in the city. The fundraising journey was no walk in the park, with challenges arising as the market slowed down. However, after 24 months of hard work and perseverance, the fund finally reached its goal.
Looking ahead, Ellis is focused on attracting top-tier tech talent to Houston and supporting founders in realizing their ambitious visions. With South Loop’s backing, he aims to create a welcoming and empowering environment for entrepreneurs to thrive. The journey may have been tough, but Ellis remains optimistic about the future and the impact South Loop Ventures can have on the startup ecosystem.
