VC Firm 11.2 Capital Raises $101 Million To Back More ‘Deep Tech’ Companies Like Ginkgo Bioworks And Hinge Health

An opportunity encounter with one among enterprise capital’s high figures helped propel 11.2 Capital founder Shelley Zhuang right into a profession a startup investing profession.

A pc science PhD from the College of California, Berkeley, Zhuang grew up with a father who was a professor in the identical area; academia was a logical profession route. However attending lessons on the Haas Faculty of Enterprise, she was moved by a chat given by Midas Record billionaire Doug Leone of Sequoia. “I simply went as much as him afterwards and stated, how do I get into this VC factor?” remembers Zhuang. “And he principally stated, ‘apply to as many positions as doable.’ So yeah, I did that.”

Twenty years later, Zhuang leads one of many extra fascinating VC corporations you’ve probably by no means heard about: 11.2 Capital. Named after the escape velocity wanted to depart Earth’s gravity (11.2 kilometers per second), 11.2 Capital focuses on investments in “deep tech,” which means biotech, healthcare, house and different research-intensive areas. Based in 2013, 11.2 Capital closed a previously-unannounced $101,010,101 second fund earlier this yr.

“I wished to begin a fund actually centered on the know-how, on actually technical founders,” Zhuang says. “On the time, there have been only a few seed funds centered on deep tech.” Information of 11.2 Capital’s new fund was first reported over the weekend within the Forbes Midas Contact e-newsletter.

Right now, 11.2 Capital manages about $150 million in capital, with standouts from a portfolio of 40-plus firms together with standouts similar to self-driving automobile service Cruise Automation, which was acquired for greater than $1 billion; biotech enterprise Ginkgo Bioworks, which went public and carries a market cap north of $25 billion; and digital clinic Hinge Well being, which reached a $6 billion valuation final week, giving the agency at the least 5 unicorns.

However rising the agency hasn’t confirmed simple for Zhuang, who landed an analyst position at DFJ (now Threshold Ventures) in 2005 following Leone’s recommendation, then helped arrange its Shanghai workplace earlier than spending about two years as a enterprise growth chief for a DFJ portfolio firm in renewable plastics, Ecoplast. It took Zhuang 5 completely different closes to lift 11.2’s first $50 million fund, which means that its early checks into winners like Cruise and Ginkgo had been comparatively small. And when Zhuang got down to increase a second fund, she discovered that institutional LPs like household workplaces and fund-of-funds had completely different expectations. One: they anticipated rising fund managers to play the connection recreation over time. “I want speaking to them is one thing I did earlier, however I used to be very centered on doing investments,” Zhuang says.

Fundraising paused in 2020 through the pandemic. However after lidar firm Aeva and fraud detection service Forter raised unicorn rounds, 11.2 Capital picked up extra steam earlier this yr, ending up with gives for extra capital than Zhuang wanted. Her agency has made 11 investments from Fund II thus far, together with hybrid vertical take-off and touchdown automobile maker Craft Aero, battery maker Sepion and cyber asset supervisor JupiterOne.

Whereas a lot of traders now invoice themselves as deep tech consultants, 11.2 Capital hopes it could possibly proceed to determine alternatives, and supply technical help, in methods others can’t. Its three principals – Jacob Smith, Pramod Gosavi and David Dorsey – all have technical backgrounds. And the agency conducts its personal thorough diligence, Zhuang says, even when it isn’t main a spherical, regardless of an investing local weather that places strain on such processes as in-demand entrepreneurs can count on fast checks.

Zhuang tells the story of an organization at Y Combinator’s Demo Day a number of years in the past that was elevating a spherical. Zhuang wasn’t certain about it, and requested a few of the different dedicated traders how its crew had solutions questions on sure issues. “They had been all like, if you would like extra element, speak to this different investor who did extra diligence,” says Zhuang. “That’s not one thing I’m snug doing. It’s our job, I consider, to unravel this stuff independently.” 

One space the place 11.2 Capital wants to adapt extra to the occasions: advertising and marketing. Having an workplace is not essential – Zhuang moved to Las Vegas through the pandemic out of non-public alternative – however entrepreneurs must see you on-line, even in deep tech. “It’s most likely an space we have to rent somebody,” the agency’s founder admits. “I’m a geek. All of us on the crew, we simply aren’t entrepreneurs by nature.”