PruVen Capital, a fintech and insurance tech venture fund founded by former Benchmark and Citi ventures VC Ramneek Gupta, has closed a new $378.5 million Fund II to invest in financial services and enterprise-focused startups.
This second fund is significant because Gupta expanded it beyond a corporate fund with one main LP – Prudential Financial – into one supported by a number of financial and insurance LPs. Prudential Financial is the lead investor but the fund also includes TIAA, Lincoln Financial, Generali, Nippon Life, Mutual of Omaha and Willis Towers Watson. Prudential was the solo LP in Pruven’s first fund of $300 million.
Gupta expects to wrap up investments from Fund I and begin investing out of Fund II later this month.
PruVen competes by offering portfolio companies access to partner with those top global insurance companies as customers. This not only helps them get a massive first customer, but also gives the LPs a first-look at emerging technologies.
Insurance and financial services companies are extremely technology driven and are eager to not just invest in, but partner with, startups, Gupta says. He points out that their partnership is significant because they are “real businesses” with real revenue and profits. They tend to be long-standing customers involved in everything from consumer to B2B, and at scale, he said.
This was something Gupta wished he had when he was at companies like Zappedy, which was acquired by Groupon in 2011. The company was working on closing the online to offline loop in the daily deals space.
Prior to that, Gupta had been a principal at ITU Ventures and partner at Battery Ventures and decided to get back into investing after the acquisition. During that time he thought about what would make him a better investor.
“I kept coming back to what would have happened if somebody was able to help me with that first reference customer,” he told TechCrunch. “I would have given an arm and a leg as a founder.”
He didn’t go out on his own right away, but got a call instead from Citi, which wanted him to help build Citi Ventures, which he did for the next nine years. During that time, he put that “first reference customer” hypothesis to the test and created a playbook to keep it going.
Between 2011 and 2020, the global investing venture team invested in 140 companies, including Square, Jet.com, Docusign and Honey, where over half of the companies landed actual commercial outcomes with a Citi business as a result of the team’s efforts.
In 2020, Gupta left Citi Ventures to start PruVen.
“I had the proof point that finding that first reference customer creates a lot of mutual value, and I had the playbook on how to do it,” Gupta said. “That’s when I decided to go improve on the structure with an independent firm structure.”
That’s when he joined forces with Prudential. As an independent firm, he said he was able to move quickly to build an even bigger network of LPs for his next fund.
Gupta’s first fund, raised four years ago, invested in companies like Bilt Rewards, Newfront Insurance, Angle Health, Contabilizei, UniteUs and Pismo, which was acquired by Visa for $1 billion in 2023.
It’s too early to discuss return on investment for Fund 1, Gupta said, but he did say the first fund currently has a 10% distributed to paid-in capital (DPI).
“We feel like we have some really good winners,” he said. “Obviously, it takes time for all of these to grow, mature and deliver returns. The best thing I can share with you is we do have actual DPI and money returned to our LPs. Even though it’s a start, it is a powerful signal to them that the model works.”
Source : Techcrunch
