Houston-based venture capital firm South Loop Ventures announced a $21 million funding I, along with Rice Management Company and Chevron Technology Ventures as host investors.

The company was founded in 2022 with a focus on seed and pre-seed companies, with an average check size of $400,000. It also mainly wants to focus on supporting the founders of color.

Zach Ellis, the company's founder and managing director, talked with TechCrunch about his last closure.

He said the fund is general and will be invested nationwide, although it does favor sectors that “reflect Houston’s industrial strength” such as healthcare, energy, space and climate.

The Texas Capital Bank, the Texas Diocese of Texas, also participated in the round. South Loop has made 13 investments so far and hopes to invest at least 30 in total.

“Given the diversity of Houston, we think it’s important to focus on the funds of different founders in Houston,” he said, one of the most diverse cities in the United States, ranking fifth. When asked if he was concerned about opposing the rebound, as his fund target founder Ellis provided a simple response.

“We strongly believe that everyone deserves venture capital, and under-invested and diverse teams offer unique opportunities for significant returns,” he said.

Despite his growing love for Houston, Ellis actually came from New Orleans and began his military career. “I’ve always been a very mission-oriented person, so after seven years in the Navy, I transitioned to the corporate department.”

This led to him working as a health care consultant, who later exposed him to the company's innovation group. The group then taught him how to use technology to help people have the ordinary people in their daily lives.

“I was like, ‘I couldn’t believe we were going to be paid.’” He recalled, “and my colleagues said, ‘You should see the job of VCs. ”

He established contacts until he landed on PepsiCo's corporate risk team, where he conducted technical scouts, corporate partnerships, and invested in food and agriculture-related funds. From there, he went to Ohio State, where he helped manage a sum of money, and later invested in a Midwest-centric venture capital fund, while startups started investing from college.

"About that time, the pandemic happened and the murder of George Floyd happened, and I was able to reflect on my career and influence and the fact that I was often the only black or brown face in any room I was in," Ellis said. "I wanted to do something about it."

By chance, he received a call from a friend in Houston who told him that the city was working to increase its popularity in technology and innovation. His friends, in particular, said many stakeholders have an appetite for fund supporters who support people of color. That, he has told many of them that Ellis would be the ideal candidate to lead a person.

So Ellis came to Houston and nurtured the idea of ​​South Loop Ventures.

He described the fundraising process as “difficulty.”

“When the market started to slow down, we started to get even more challenging,” he said. “While we had a strong initial momentum, it took us 24 months to finish.”

He met with most of the fund's existing investors through a network of stakeholders, adding that the mercury fund helped him connect with other investors in the ecosystem in particular. Next, Ellis hopes to lure more technical talents in the city. Of course, some money is also poured into the founders who hope to build the next big thing.

“People will naturally be attracted here, and I believe this will help attract top founders who will not only see business opportunities, but will also feel welcome and comfortable,” he said. “With the support of South Road, we aim to make sure they can be competent as well.”