Early-stage investor Susa Ventures has announced the close of its fifth fund, securing $175m to back nascent technology companies. The firm, known for its early bets on now-prominent names like Robinhood and Flexport, is doubling down on its strategy of identifying promising founders and providing significant early-stage capital.
The new fund, dubbed Susa Ventures V, will continue the firm’s focus on pre-seed and seed-stage investments, with cheque sizes ranging from $500,000 to $5m. In a direct message to founders, Chad Byers, General Partner and Co-founder, emphasized the firm’s commitment to helping companies build momentum from their earliest days.
A notable aspect of Susa’s investment philosophy, articulated in their announcement, is their emphasis on independent conviction. “We build independent conviction — we don’t care who else is in the round,” Byers stated. This assertive stance signals a willingness to lead investments and back founders even if other venture capital firms are not yet on board, potentially offering a crucial lifeline for startups in the often-competitive early-stage funding landscape.
Founded in 2013, Susa Ventures has cultivated a reputation for identifying high-potential companies early. The firm claims its portfolio companies achieve unicorn status — a valuation of $1bn or more — at a rate ten times higher than the industry average. They also report that their backed companies secure Series A funding at approximately twice the industry average valuation, leading to less dilution for founders. These figures, while self-reported, underscore the firm’s track record and appeal to ambitious entrepreneurs.
Susa Ventures maintains a sector-agnostic approach, with a primary focus on software. However, the announcement highlights a particular enthusiasm for artificial intelligence, stating that the firm believes AI is currently “underhyped.” This aligns with a broader trend in the venture capital world, where AI-focused startups are attracting significant investment. Specific areas of interest for the new fund include alternative AI architectures, custom software leveraging generative AI, AI research assistants, and the intersection of biology and AI (TechBio). The firm is also eyeing opportunities in energy, AI infrastructure, consumer applications in a post-AGI world, risk management, and AI-driven supply chain solutions.
Beyond its domestic focus, Susa Ventures has also demonstrated a commitment to international markets, particularly in Africa. The firm was an early investor in Andela, a company that trains software developers across the continent, and in Okra, a Nigerian open finance fintech infrastructure company. More recently, Susa led a $5m investment in Kenya-based Powered by People, a B2B wholesale marketplace connecting independent brands with retailers globally. This international exposure provides Susa with a broader perspective on emerging technologies and market opportunities.
The firm emphasizes a “founder-first” approach, highlighting that they have never voted a founder out of their business in their 12-year history. This commitment to supporting founders through challenges can be a significant draw for early-stage entrepreneurs navigating the complexities of building a company.
Susa Ventures’ fifth fund draws capital from US-based institutions, including non-profit foundations, education endowments, and healthcare providers. This diverse investor base reflects the growing appetite among institutional investors for exposure to the potential high returns offered by early-stage venture capital.
The launch of this $175m fund comes at a time of both excitement and uncertainty in the technology sector. While AI is generating significant buzz and investment, the broader economic climate remains volatile. Susa Ventures’ willingness to take a strong stance on investments, irrespective of other investors, could position them as a key player in identifying and nurturing the next generation of category-defining companies. Their track record and clearly articulated investment thesis will be closely watched by the venture capital community and the entrepreneurs seeking their backing.