South Loop Ventures Closes $21M Fund for Diverse Founders

South Loop Ventures Secures $21M Fund to Back Diverse Founders

Houston-based venture capital firm, South Loop Ventures, has announced the close of its $21 million Fund I. Rice Management Company and Chevron Technology Ventures led the round as anchor investors.

Launched in 2022, South Loop Ventures focuses on seed and pre-seed stage companies, with an average check size of $400,000. The firm prioritizes investments in founders of color.

Managing Director and Founder, Zach Ellis, shared that the fund will invest in founders across the nation, with a focus on sectors reflecting Houston's strengths, including healthcare, energy, space, and climate tech.

Texas Capital Bank and The Great Commission Foundation of the Episcopal Diocese of Texas also participated in the fund. South Loop Ventures has already made 13 investments and aims to invest in at least 30 companies.

Focusing on Diversity in Houston's Thriving Startup Scene

“We believe venture capital should be accessible to everyone,” Ellis stated. “Underinvested and diverse teams offer a unique opportunity for significant returns.” This commitment to diversity aligns with Houston's ranking as one of the most diverse cities in the United States.

Ellis, originally from New Orleans, began his career in the military before transitioning to the corporate sector. His experience in healthcare consulting and corporate innovation sparked his interest in venture capital.

After working with PepsiCo's corporate venture team and managing investments at Ohio State University, Ellis was inspired to create a fund focused on supporting underrepresented founders.

Building Houston's Tech Future

The fundraising process, which took 24 months, coincided with a market downturn. Ellis credits his network and the support of firms like Mercury Fund for helping secure the funding.

South Loop Ventures aims to attract more tech talent to Houston and empower founders building innovative companies. Ellis believes Houston's appeal as a vibrant city will attract top-tier founders seeking both business opportunities and a welcoming community.