PruVen Capital, a fintech and insurtech venture fund founded by former Benchmark and Citi Ventures venture capitalist Ramneek Gupta, has closed a new $378.5 million Fund II to invest in financial services and enterprise-focused startups.
This second fund is significant because Gupta has expanded it from a corporate fund with one anchor LP, Prudential Financial, to a fund supported by a number of finance and insurance LPs. Prudential Financial is the lead investor, but the fund also includes TIAA, Lincoln Financial, Generali, Nippon Life Insurance, Omaha Mutual Insurance Company and Willis Towers Watson. Prudential was the sole LP in Prven's first $300 million fund.
Gupta has closed his investment from Fund I and plans to start investing from Fund II later this month.
PruVen competes by offering its portfolio companies access to some of the world's top insurance companies as clients, which not only allows the portfolio companies to land large initial customers, but also gives LPs early exposure to emerging technologies.
Insurance and financial services companies are very technology-driven and are eager to not only invest in but also partner with startups, Gupta said. Partnerships are important, he noted, because these companies are “real businesses” with real revenue and profits. These companies tend to be long-standing clients with large-scale involvement in everything from consumer-facing to B2B, he said.
It's something Gupta wanted during his time at companies like Zappedi, which was acquired by Groupon in 2011, and which was trying to close the online-to-offline loop in the area of daily deals.
Gupta, who was previously a principal at ITU Ventures and a partner at Battery Ventures, decided to return to the investment world after the acquisition, during which he thought about what he could do to become a better investor.
“I've often wondered what would have happened if someone had helped me with my first referred customer,” he told TechCrunch. “As a founder, I would have given up a lot of money.”
He didn't go out on his own right away, but instead got a call from Citi asking him to help build Citi Ventures, a job he did for the next nine years, during which he tested the “first reference customer” hypothesis and created a strategy to keep it going.
From 2011 to 2020, the global investment and venture team invested in 140 companies, including Square, Jet.com, Docusign and Honey, and as a result of the team's efforts, more than half of the companies have achieved real commercial results in Citi's business.
In 2020, Gupta left Citi Ventures to found PruVen.
“I had evidence that finding those first referral customers creates a lot of mutual value, and I had a strategy for how to do that,” Gupta says. “That's when I decided to restructure with an independent corporate structure.”
That's when he partnered with Prudential: As an independent, he said, he could quickly build out an even larger network of LPs for his next fund.
Gupta's first fund was launched four years ago and invested in companies such as Built Rewards, NewFront Insurance, Angle Health, Contabilizay, UniteUs and Pismo, which Visa acquired for $1 billion in 2023.
Gupta said it is too early to discuss the return on investment for Fund 1, but that currently, Fund 1 is 10% distributed towards paid up capital (DPI).
“We feel like we have some really good winners,” he said. “Obviously, all of this takes time to grow, mature and become profitable. The best thing I can tell you is that we do have DPI and we're actually returning money to our LPs. This is just the beginning, but it sends a strong signal to them that the model is working.”