Zeal Capital Partners announced on Wednesday the close of its second fund, raising $82 million. Limited partners in the fund include Citi Impact Fund, M&T Bank, Wells Fargo, and Spelman College. It hopes to invest in at least 25 early-stage companies, writing check sizes between $1 million and $2.3 million, with 50% of the fund reserved for follow-on investments.
Speaking to TechCrunch, Nasir Qadree, founder and managing partner of Zeal, said Fund II will focus on financial technology, healthcare, and future of work, as its other fund did. It has already invested in at least five companies, including the maternal health platform Seven Starling and the fintech Debbie.
Qadree described the funding environment for Fund II as “undoubtedly challenging” because of macroeconomic uncertainty, LP rebalancing, and tighter allocation windows.
“But these headwinds also sharpened our strategy and reaffirmed the strength of our approach,” Qadree said. “I’m proud to share that over 80% of our limited partners from Zeal Fund I continued with us into Fund II, a signal of deep conviction in our ability to consistently back category-defining companies.”
Black-led and founded funds such as this have been making some sizeable closes lately.
Slauson & Co. announced a $100 millio Fund II last September, followed by Illumen Capital, founded by Daryn Dodson, announcing the raise of a $32.75 millio fund in November. This year, Sydney Thomas’ Symphonic Capital announced the raise of a $13.5 millio inaugural fund, while Cherryrock Capital, founded by Stacy Brown-Philpot, announced the raise of its $172 millio Fund I.
Some of these funds are general in their mission, while others are more explicit in their target of underrepresented communities, showing that appetite still exists for such funds, despite the pressure from the current U.S. presidential administration, and among those that support it, against anything that could be considered “DEI.”
Overall, Zeal, a more generalist fund founded in 2019, has invested in 40 companies. Fund I announced its close at $62.1 million in 2021.