Susa Ventures has held the closing of Susa Ventures II, a USD50 million seed stage venture fund.
The firm plans to make a dozen investments each year in companies that have found strong product/market fit and are building long-term defensibility through proprietary data, network effects and economies of scale.
Susa's first fund, which had a similar focus, is a portfolio of 41 companies that includes Flexport, which achieves economies of scale by handling high shipment volumes; Casetext, which is building the leading resource for legal analysis using a growing network of legal experts; and LendUp, which leverages proprietary data to provide short term loans to the underbanked.
The firm has invested in a variety of sectors, from fintech, edtech, and ecommerce, to augmented reality and quantum computing.
"As seed investors, we are betting on how companies will be valued eight to 10 years in the future," says Leo Polovets, a founding general partner at the firm. "Because we take the long view, we look for companies that are building sustainable competitive advantages through proprietary datasets or other means. These companies create a meaningful impact on the world, like Andela, which trains software engineers in Africa and helps them find work; Robinhood, which makes public market investing more accessible to Millennials; and Bright, which is accelerating adoption of solar energy in developing countries. If a start-up creates a lot of value and has a strong competitive moat, it’s much more likely to have a large financial outcome."
Susa Ventures is made up of three general partners including Seth Berman, who was VP of strategic marketing at Richemont and an angel investor in companies like Nest, Wish, Optimizely, and Docker; Chad Byers, who held management positions at Silver Spring Networks and Integrate; and Leo Polovets, who was one of the first engineers at LinkedIn and later worked at Google.
While most seed funds have one or two partners, having a larger partnership allows Susa Ventures to spend more time working directly with portfolio companies on everything from drafting pitch decks to beta testing APIs to conducting UX reviews.
CB Insights recently listed Susa Ventures as the top Micro VC when it comes to follow-on rates from top tier Series A firms.
"Susa has been hands-down one of Flexport's most engaged, connected, and helpful investors," says Ryan Peterson, CEO of Flexport. "Over half of our anchor clients came through Susa introductions, and those in turn led to the other half coming on board. Flexport would be half as good a company without the clients that came through Susa introductions."
