Daraja Capital, a consultant to diverse managers since 2016, said the seed capital platform it created last year has made its first investment.
The investment in Serac Ventures, an Oklahoma City-based venture capital firm founded by Kevin Moore that seeks startups with nontraditional founders, is emblematic of what Daraja has been working to foster in financial services. Raudline Etienne, CEO of Daraja Capital, created the firm to bridge the wide gap between capital and diverse managers raising funds for the first time.
“It is gratifying to partner with a firm who approaches their space in a similar fashion as we do. The amplifying effect is positive from our perspective,” Etienne told Institutional Investor.
Moore was previously a partner at Spur Capital Partners and has more than 18 years of experience in private markets, but partnering with Daraja will give his young firm a meaningful boost.
“Working with Daraja Capital provides Serac Ventures with a high degree of credibility in the marketplace that would ordinarily take years to build,” Moore said. “Raudline brings a wealth of investment experience and connections in the private markets industry, and we are super excited to start our partnership with her and the entire Daraja team.”
Serac focuses on early-stage fintech, SaaS and commerce companies, as well as future-of-work and creator-economy startups. It plans to use the capital from Daraja to launch its first fund. Serac generally invests between $500,000 and $750,000 in companies. How much Daraja invested with Serac was not disclosed.
Venture capital just happened to be the asset class that Daraja’s first investment focused on. It’s been a rough couple years for VCs. “While we are aware that fundraising will likely continue to be a challenge, Serac will be investing in an environment when founder expectations and valuations have become more reasonable,” Etienne said.
Daraja is also considering partnering with managers that have private equity, real estate, credit, and special situations strategies. How it engages partners is flexible and can vary. Daraja can provide asset managers with working capital, equity for the commitment by general partners, and invest in their funds as a limited partner. It also wants to align its interest with those of its firms, so it might share revenue, participate in carry, or co-invest.
Other firms have made it a mission to seed diverse fund managers or help start diversity-minded investment strategies. Etienne helps Daraja stand out because she has experience as both a consultant and allocator. She was previously the chief investment officer for the New York State Common Retirement Fund, one of the largest public pension funds in the U.S. with over $254 billion in assets, and worked for Rogerscasey, the investment consultant now known as Segal Marco.
Institutional investors collectively have trillions of dollars of assets and much of that is allocated to alternative managers. Daraja is set on getting a bigger portion allocated to fund managers who have historically been overlooked.
“Every legendary investor had someone who went first,” Etienne said. “The institutional investor community needs to widen the aperture.”
