NEWS: Co-Founder of CerraCap Ventures, a VC Firm and Incubator, Manages With Experience
In light of the founder of a local incubator and affiliated funds losing an arbitration case recently, OCSN is looking into other situations where VC firms and funds are linked to incubators. (See story here about Stuart Frost, and his affiliated venture funds, losing the arbitration case and being ordered to pay $12 million back to investors as a result.)
The first one in this series is CerrraCap Ventures in Costa Mesa. It’s an early-stage VC firm with its own incubator. One of the co-founders, Saurabh Suri, has considerable previous investment experience on the corporate side. And, also, unlike Frost, Suri and his co-founder set up a venture capital firm that invests in portfolio companies, as well as in its own incubated companies. Frost’s funds only invested in his incubated companies.
The fund uses a sales-and–scale method, said Suri, who serves as managing partner and CIO. He and his co-founder, Saurabh Ranjan, personally introduce companies to Fortune 500 decision makers using the international Rolodex they amassed at UST Global, a multinational provider of digital and IT services with HQ in Aliso Viejo.
The fund only invests in AI, cybersecurity and healthcare tech. Suri declined to disclose the amount of the fund or how much equity CerraCap takes.
CerraCap initially attempted to raise $50 million, but investors did not bite, according to news reports, so the firm exponentially decreased the amount it was looking to raise.
The fund has now raised around $5 million, according to news reports.
Its first exit, which was announced recently, is Swych — a digital gifting and exchange platform built with AI, using an “advanced machine learning base,” according to a press release.
CerraCap’s stake in Swych was bought by UAE Exchange, which provides money transfer, currency exchange and payment solutions services. Details of the acquisition have not been disclosed. UAE Exchange’s HQ is in Abu Dhabi.
Tech and Investment Experience
Suri amassed more than 15 years of experience in the tech industry, most recently as VP for emerging solutions, innovation and investment at UST Global. There, he conceived and led the company’s global tech investments fund and helped monetize the portfolio through its “extensive” client base.
Suri knew Ranjan from UST Global. Ranjan served as COO at that company. He’s now the CEO of Cerra Cap.
The incubator provides infrastructure, seed financing and an international client base, Suri said.
The incubator has two “promising” startups, Suri told OC Startups Now. One uses AI to ferret out extraneous data. The other is in the quantitative trading space.
The AI company is Nirveda Cognition. It’s an AI analytics platform designed to ferret out “dark data,” using cognitive search functions, natural language summarization and intelligent process automation for the B2B and B2E (business-to-enterprise) markets. Dark data is data acquired through various computer network operations but not used in any manner to derive insights or for decision making.
It’s received $1.2 million from CerraCap in seed funding. And it’s now trying to raise a $5 million Series A round. Its valuation is confidential, CEO is Ajay Kapur told OC Startups Now. The company is in revenue.
Its first targets are the real estate and mortgage industries.
It launched a year ago. Kapur formerly co-founded Kadenze, which developed a B2B learning management system and a B2C online learning platform. He also co-founded Karmetik, an AI and robotics consulting firm.
While Nirvada’s HQ are at CerraCap’s office in Costa Mesa, it also has a satellite office in Valencia.
It uses a SaaS subscription model. The platform enables organizations to automate processes such as storing data in databases, creating summaries and composing written communications.
It recently finished developing a product for the real estate/ finance industry to automate the title search process for mortgage processing.
The other startup is Quantix, a quantitative trading platform, that’s currently in stealth mode. It develops algorithms that come up with trends.
For this company, Suri said that CerraCap hired some of the “top” deep learning scientists from Israel.
Cerra Cap seeded this company with an undisclosed amount. And, Quantix is now about to open a $3 million Series A round.
Initially, CerraCap assumed that Quantix would function as an information provider, selling market insights to hedge funds. But when CerraCap ran the initial tests, the results were better than expected. So CerraCap decided to capitalize on the info and trade on it, instead of sell it, Suri said.