Zeal Capital Partners closed a $62.1M fund for inclusive investment

With a focus on inclusive investing, D.C.-based venture firm Zeal Capital Partners closed a $62.1 million fund to invest in early-stage fintech and future of work businesses. With the final close, the firm’s first fund was oversubscribed, as Zeal has raised more than its goal of $50 million.

The funding was led by Truist and Paypal, with additional investments from Synchrony Financial, the Skoll Foundation, Foot Locker, DC’s RockCreek, Hampton University Endowment, Southern New Hampshire University,  and Gary Community Investment.

Founder Nasir Qadree told Technical.ly that the venture firm intends to support companies that are making an effort to close the wealth and skills gap and follow its five pillars, which include backing diverse management teams and impact-based investment efforts. The company will invest in 25 to 30 companies over a four-year period, which will be about six to eight companies annually.

“My North Star is to ensure whether you’re a storied franchise or emerging manager…that inclusive investing becomes the gold standard in terms of how we think about how we source, how we invest and how we scale innovative businesses everywhere,” Qadree, who is Zeal’s managing partner, said.

Zeal held an earlier close at $22.3 million in November of 2020. According to Qadree, the firm initially went out to raise $25 million, but bumped up the goal to $50 million, with a hard cap of $100 million, after the response was so positive. It ended up surpassing that $50 million goal.

Zeal will be investing in early-stage companies and taking board seats. Each company will sign a diversity pledge to either become or maintain a diverse management team. The pledge, Qadree said, also signals that a company is offering a service or product to low-wealth communities and workers.

“The goal here is that we are building and an investment-class institutional fund that’s laser focused on investing in solutions that are directly tied to narrowing the wealth and skills gap by way of investing in financial technology and future of work products and services,” Qadree said.

In addition to the diversity pledge, the inclusive investing strategy also means companies in the portfolio will participate in an Environment, Social and Corporate Governance (ESG) working group. Qadree also said that company is aligning investments with at least nine of of the 17 global sustainable development goals from the United Nations, which include aims like ending poverty, increasing equality, prioritizing sustainability and infrastructure innovation.

“We want to partner with local investors and let them know that we believe that the founders that they’re partnering with, the founders that are in their own backyard, we believe in their investment and we want to come alongside you,” Qadree said.

Coming off of the Fourth of July, Qadree added that the US itself was “once a startup,” and cities like Pittsburgh and Detroit were once the centers of innovation, as Silicon Valley is now. That’s why he’s looking at multiple locations for investing. He hopes that Zeal’s investments reflect the diversity of innovation across the country.

Following this close, Qadree said Zeal will be focusing primarily on investments over the next four years. But he’d eventually like to expand the firm further, potentially even worldwide.

“We’re truly casting a wide net and looking to source that depth of innovation in our country, not just very few places,” Qadree said.