An El Paso-based venture firm secured a big-name investor for its inaugural fund, which has already pumped money into a series of startups in the Southwest with plans for several more investments.
Audaz Capital, the El Paso-based firm, announced on Sept. 24 that Bank of America joined its first venture fund as an institutional investor. The Bank of America investment comes as part of the fund's second close, with additional room for investors to join the fund, Ebetuel "Beto" Pallares, Ph.D., the founder and managing partner of Audaz Capital, told New Mexico Inno Wednesday.
Pallares said Audaz Capital is targeting $25 million for its inaugural fund, a figure that could rise to $50 million depending on investor interest. The firm is roughly half way to that $25 million target with its second close, he added.
"Bank of America's support will be instrumental in accelerating our efforts to unlock new opportunities and empower the vibrant communities we serve," Pallares said in a statement.
Hunt Companies Inc., a real estate, infrastructure and financial services-focused holding company based in El Paso, is another "anchor" investor in Audaz Capital's first fund, alongside Bank of America, Pallares said.
The fund focuses on investments in startups either based in or with significant operations in the Southwest region. Specifically, the fund hopes to invest in "underrepresented founders in overlooked regions," Pallares said in the statement.
Kristi Marcum, the president of Bank of America El Paso, said in a statement the investment in Audaz Capital "is another example of the bank's commitment to expand access to capital for all communities."
Audaz Capital has invested in six such startups to date. Those startups include:
- Finhabits, a bilingual financial wellness startup.
- LoanWell, which is developing an automated lending and grant technology.
- AizenFlow, an artificial intelligence-backed trucking logistics startup.
- Fonda, developing a software-as-a-service platform for small restaurants.
- Knomee, a financial technology startup focused on financial identity.
- Linker Finance, a digital banking startup.
While many of the startups it's currently invested in are based on financial technology, Audaz Capital's other industry focus areas include energy and water technology, as well as supply chain and logistics technology. There's particular potential for those types of investments in the region because of advanced technology developed by major laboratories and universities in the Southwest, and because of the increased flow of goods across the U.S.-Mexico border, Pallares said.
He said the firm envisions making roughly 20 investments out of its first fund, including those into its existing six portfolio companies. It typically invests between $250,000 to $750,000 in startups, with checks that could go up to $1 million.
Smaller funds, like Audaz Capital's first, tend to perform better in terms of returning dollars to the institutional investors, or individual limited partners, or LPs, who choose to join the fund, Pallares explained. While the firm plans to make investments out of its first fund over the next three to four years, its second fund — which could start raising money once most of the dollars in the first fund are deployed to startups — would be about the same size.
That's in order to keep the funds "nimble," Pallares said, to capitalize on that return potential.
He added the firm is currently talking to "a number" of startups in New Mexico about future investments, although he didn't provide specific company names.
Alongside Pallares, Audaz Capital's managing partner, the firm includes Carlos Murguia, who works as a partner in the firm, Michael White, who handles the firm's accounting, and Maximo Gamez, an analyst for the El Paso firm. Pallares said the firm is looking to add a fifth member, as well, although he said it's not yet clear what position, specifically, that new hire would handle.
