Subscribe to the 附近上门 Daily

The round brings One鈥檚 total raised since its January 2019 inception to $26 million. The startup, which is based in San Francisco and Sacramento, previously raised $9 million from its chairman and co-founder .

We鈥檝e been covering the rise of neobanks globally. Just last week, for example, I wrote about , a New York-based digital bank aimed at small and medium businesses (SMBs), raising a $21 million Series A.

This news caught my attention for a couple of reasons. For one, One鈥檚 co-founders are serial entrepreneurs with deep industry experience. Former CEO and founding CEO serves as One鈥檚 chairman. who co-founded PushPoint (which was ), is CEO of One.

I鈥檓 also intrigued by the company鈥檚 emphasis on the middle class. To be clear, there are other digital banks focused on this demographic (, which neared unicorn status last year with a $100 million Series C, being a prime example). But there鈥檚 no doubt that as the country faces a potential recession fueled by the coronavirus pandemic, the middle class will be among the hardest hit.

The company told me: “We are focused on middle-income families across the US. This includes traditional families, but also single partners, people who support parents, kids and other family members; roommates and more.”

I also find it interesting that Obvious Ventures, an impact investor, put money in the round. One, which today said it is opening up early access to its private beta, also claims to be the first digital banking service to integrate credit with the goal of 鈥渕aking it seamless to save, spend and borrow money.鈥� The thought behind that is that in the current financial system, people鈥檚 money is broken up into siloes, according to Hamilton.

鈥淢ost people have a balance in their checking account that earns nothing and outstanding debt on their credit card that costs too much,鈥� he said in a written statement. 鈥淥ne is designed to maximize a family鈥檚 hard-earned paycheck by unifying saving, spending and borrowing into one account. When this money is being managed from one place, people save more, are charged less and gain control.鈥�

To Harris, One addresses a gap in the banking industry.

鈥淭raditional banks cater mostly to affluent customers and new digital banks target younger individuals with simpler financial needs,鈥� Harris said in a written statement. 鈥淢iddle-class American families are being left out.鈥�

One is planning for a public launch this summer, and its new capital will help it scale toward that goal. The company currently has 40 employees.

Illustration:

Subscribe to the 附近上门 Daily

and founded New York-based Equal Ventures last year with the goal of investing in 鈥渇ounders who are bringing technology innovations to existing markets that will transform society and industry.鈥�

In other words, they鈥檙e looking to back entrepreneurs looking to shake up existing industries that impact 鈥渢he way we work and live.鈥� Those industries include: insurance, logistics/supply chain, retail infrastructure and the care economy.

鈥淲e鈥檙e not focused on technology development, such as internet infrastructure, but more on the deployment of technology,鈥� Zullo told me in a phone call. 鈥淥ur core focus is to bring the knowledge and networks necessary to help founders solving problems in these complex and nuanced industries in their push to attract capital and bring products to market.鈥�

Also, Equal has the ambitious goal of bridging the digital divide 鈥渂etween the combative worlds of incumbents and innovators.鈥�

鈥淥ne of our core beliefs is that by bridging that divide between the technology haves and have nots, benefits are more evenly distributed across all parts of society and industries,鈥� Zullo said. 鈥淎t the same time, we look to generate some great returns.鈥�

Old-hand investors

Kerby and Zullo are no strangers to investing. They鈥檝e previously backed and worked with a number of companies that have seen successful exits such as (acquired by ) and hiring platform (bought out by ). And they did this while working at VC firms such as , , and . Kerby also founded , a community for African Americans in tech.

The pair鈥檚 approach to sourcing deals for Equal Ventures is what they describe as data-driven. They spend the majority of their time researching and analyzing the dynamics of the markets in which they鈥檙e looking to invest. Their goal is to identify potential solutions to the market before it鈥檚 obvious.

Notably, they have an interesting mix of LPs, including founder and CEO . Other LPs include the founders of new Austin-based unicorn , traditional institutional LPs, university endowments, general partners of other VC firms and some Fortune 500 executives 鈥渨ho know how to move needles in these industries鈥�

鈥淥ur LPs are a combination of industry operators, providers of investment capital and top-tier founders, which we believe is exciting alchemy for future success,鈥� Zullo told 附近上门 News.

Staying connected

Equal Ventures had its first close last April and has since invested in six portfolio companies.

Those portfolio companies include: retail platform , home renovation marketplace , employee benefits-focused and , which aims to improve 鈥渢he access, accountability, and affordability in the senior living market via a managed marketplace to help place seniors in the best facilities.鈥�

Equal Ventures鈥� goal with the fund is to invest in 20 companies total with an average initial check of about $1.5 million, according to Zullo. It does not have a multistage strategy, he adds. Instead, the firm wants to get in at the early stage with a significant ownership stake.

鈥淲e鈥檙e a little bit more concentrated and focused on getting ownership early,鈥� Zullo said. 鈥淲e want significant skin in the game and at the same time, we don鈥檛 want to invest in too many companies so that we can make sure we have the time and resources necessary to be hands-on for those companies.鈥�

Illustration:

Subscribe to the 附近上门 Daily

Rhode Island is the nation’s smallest state. It’s also the state I’m in the process of adopting as my own. Davis’s founder track record makes his hire interesting. That track record combined with his new locational base makes it all the more curious. Let’s explore.

History

Foundation Capital, founded in 1995 according to 附近上门, has raised nine main funds including of this year. So, the firm is newly-capitalized. (Foundation’s preceding fund, , was a $325 million capital pool announced in late 2015.)

According to , Foundation invests mostly in companies that fall into the software, enterprise software, SaaS, and analytics buckets. Or, the venture group puts most of its capital into companies that are likely to generate the highest-tier of gross margins. It’s not a bad bet, as we’ve seen from record revenue multiples given to companies in those spaces.

Davis’s background fits the thesis. His first company, , became a “SaaS business with over $100 million in annual revenue” in . The company sold to Microsoft for a little under $1 billion. The new venture capitalist’s second company, , wound up entering into a “strategic investment and partnership” with , a big private equity shop famous for buying software companies, cutting costs, boosting revenues, and later exiting.

That deal, announced in 2017, freed up some of Davis’s time. But he didn’t want to move much. Upserve is based in Providence, Rhode Island, not far from where Davis lives. And now, as part of Foundation Capital, Davis will stay in the Ocean State and take part in the firm’s investment cadence from an East Coast base, sitting as he does in between Boston and New York.

Remove Venture

To get a handle on what Davis is up to, becoming a somewhat uncommon venture capitalist based in Rhode Island, I got him on the phone last week to dig in.

Up top Davis expects to spend “a fair amount of time in” New York City. So while he’ll be based in the southern bit of Lil Rhody, he’ll wind up in the main East Coast startup hubs regularly.

But not every day. In our conversation Davis referred to himself as the first “Zoom-based” venture capitalist, which can’t be true but makes a good point; namely that in the remote era, why can’t some investing professionals lunch in places other than Mourad and the Rosewood?

With an eye on what鈥檚 going on around American鈥檚 right coast and his firm based on its left, Davis hopes to be 鈥渋nformed鈥� by both the Bay Area鈥檚 happening and the East Coast鈥檚 perspective, he told 附近上门 News.

Regarding where he may invest, SaaS was an unsurprising theme. In our conversation, Davis discussed vertical SaaS as an attractive area of investment, along with SaaS companies that “enable commerce.” Regarding the latter, think about companies that have dual business models, fusing regular software incomes with other revenues, ala . (We also riffed on the market potential of low-ACV SaaS companies, especially those focused on selling to SMBs; there’s potential there if more folks wanted to take on the challenge. But we digress.)

Foundation Capital’s Fund IX is a return to form of sorts. As when it was raised, “the once-small firm closed its sixth fund with $750 million in capital commitments in 2008 before it was forced to scale back dramatically, closing its seventh fund with $282 million in 2013.” It’s a firm on the rebound, then.

Let’s see what Davis can get done in the next few months before we chase him down and make him tell us how it’s all going.

Illustration: .