South Loop Ventures has officially closed a $21 million Fund I to support early-stage startups, with a strong focus on founders of color, TechCrunch reports. The Houston,TX-based venture firm is part of a growing movement to reshape who gets access to capital and where that capital flows.
Fueling Founders From The Ground Up
Founded in 2022 by Zach Ellis, South Loop Ventures, according to TechCrunch, focuses on seed and pre-seed investments, writing average checks of about $400,000. Anchor investors include Rice Management Co. and Chevron Technology Ventures. Additional contributions came from Texas Capital Bank and The Great Commission Foundation of the Episcopal Diocese of Texas.
The tech outlet reports that the firm has made 13 investments and plans to back at least 30 companies from the fund.
“We thought it was important to have a fund focused on diverse founders here in Houston, given Houston’s diversity,” Ellis told the outlet.
Though South Loop Ventures invests nationally, its thesis leans into sectors that align with Houston’s core industries: energy, health care, space, sports, fintech, and climate, the company’s website states.
Built To Serve, Born To Innovate
Ellis didn’t come from a typical venture capital background. He’s a New Orleans, LA, native who spent seven years serving in the U.S. Navy before moving into healthcare consulting. That work eventually introduced him to corporate innovation, leading to a role on PepsiCo’s venture team and an investment management role at Ohio State University, according to his bio.
Those experiences exposed him to the mechanics of venture capital, but also to the lack of diversity within it. Per TechCrunch, the pandemic and the racial justice uprisings of 2020 pushed Ellis to reconsider how he wanted to contribute to the industry.
“I was often the only Black or brown face in any room,” Ellis told the outlet. “I wanted to do something about it.”
A New Chapter For Houston Tech
As TechCrunch details, the idea for South Loop Ventures emerged after a conversation with a Houston friend, who told Ellis the city was ready to participate in a fund that would intentionally back diverse founders. Encouraged by the opportunity, and with early ecosystem support, Ellis made the move.
Per the outlet, the fundraising process took two years, but strategic connections, including support from Mercury Fund, helped the firm cross the finish line.
“It’s truly a humbling moment, and while we’re off to a strong start, this is just the beginning of our journey,” Ellis stated in a LinkedIn post.
Now with funding secured, he can focus on building momentum and attracting top talent to Houston.
