Garuda Ventures’ debut fund will invest in B2B-focused software companies

Pre-seed and seed-stage startups focused on business-to-business have a new source of capital. Garuda Ventures, an emerging venture capital manager, closed on its debut fund with $31 million in commitments to invest in B2B-focused software companies.

Rishi Taparia and Arpan Punyani, the firm’s two general partners, know a thing or two about scaling companies from their previous positions. Taparia was an early employee at both Poynt, a payments processor that was acquired by GoDaddy in 2020, and workforce management platform Legion. He was also previously an investor at Matrix Partners and spearheaded the firm’s seed investment in Canva.

Punyani previously spent over eight years at identity management company Okta, where he worked across inorganic growth teams. He focused on M&A and strategic partnerships and helped grow the company from around 200 employees in 2013 to its 2017 IPO.

Taparia and Punyani raised $2.8 million in 2018 for a “proof of concept” fund, which they invested in 32 companies. The pair then officially started Garuda Ventures in late 2021 and began talking to investors for the debut fund. They concluded the fund raise three months ago.

“Our primary lens to partnering with founders is that we’re firm building ourselves, and we’re going be here for a long time because we’re building a franchise,” Taparia told TechCrunch. “Our goal is to be the first call on that short list for founders.”

The Garuda team invests across four areas that Taparia and Punyani describe as:

  • The New Perimeter: Cloud-native security and programmable infrastructure.
  • Climate 2.0: Digitization of the energy markets, grid management and low-carbon transition.
  • Intelligent Applications: AI-enhanced applications and vertical SaaS.
  • Commerce Infrastructure: Tech that can unlock access and liquidity.

The firm plans to invest in 25 to 30 companies at the pre-seed and seed stages with check sizes ranging from $500,000 to $1 million. Taparia and Punyani already invested in 13 companies from the new fund to date.

Though companies at these stages aren’t necessarily thinking about M&A, Punyani said M&A activity is expected to come back, buoyed by the recent Atlassian/Loom and Databricks/Arcion deals, and that Garuda Ventures has a unique offering for founders given his background.

“After building up the partnership and M&A sides of Okta, and if portfolio companies are receiving inbound M&A interest, we are in a position to advise based on experience on the other side of the table as buyers,” Punyani said.

Portfolio firms include Dashworks, providing a search engine for a company’s internal knowledge; Stax, a company enabling Africans to transfer funds via automated USSD codes; and Evergrow, a climate project financing company.

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