It only took solo venture capitalist Zal Bilimoria five phone calls to raise his latest $50 million fund.
The former Andreessen Horowitz partner, who left the firm a decade ago to start VC firm Refactor Capital, said the new fund brings his total assets under management to nearly $300 million and will allow him to keep writing $1 million to $2 million checks into pre-seed and seed-stage startups.
Bilimoria describes himself as a generalist hard-tech investor, with an interest in startups tackling big physical-world problems. He is looking at biotech companies working on fertility and immunity, as well as companies building in robotics, energy, aerospace, critical materials, and AI infrastructure.
The renewed investor interest in hard tech and AI in the physical world comes after years of venture capital flowing primarily into software.
Jeff Bezos’ new startup, Prometheus, which focuses on physical AI uses in manufacturing and other industries, was just valued at $38 billion. In April alone, physical AI startups raised around $5.3 billion in VC funding, according to Crunchbase data. Bilimoria said Refactor has been investing in the category long before it became fashionable.
“I’ve been doing hard-tech investing for a dozen years,” Bilimoria told Business Insider. “It’s nice to welcome all these other investors to the party, because there are a lot of huge businesses to be built.”
Bilimoria moved into investing after stints as a product manager at Google, Netflix, and LinkedIn. He helped launch Andreessen Horowitz’s first bio fund in 2015, a departure for a firm then best known for its software bets.
Soon after launching the fund, he left to start Refactor, named for the process of restructuring existing computer code so it works the same way but is cleaner and easier to build on. Bilimoria’s goal, then and now, he said, is to back founders “refactoring the real world.”
His firm has since backed six unicorns, including the green-chemicals maker Solugen and the satellite startup Astranis. Bilimoria said he looks for founders who are magnets for three types of people: customers, talent, and investors.
Last year, Bilimoria invested in 11 startups, above his usual pace of seven or eight deals a year. He hadn’t planned to raise Refactor’s next fund until later this year, but after deploying capital more quickly than expected, he decided in January to test demand among the firm’s existing limited partners, which are investors in the fund. Within a few phone calls, Refactor’s fifth fund was fully raised from existing LPs. He even had to turn down offers to invest in order to keep the fund size at $50 million, because anything larger would be difficult to manage as a solo capitalist.
Bilimoria credits much of his success to staying solo. In Refactor’s early days, he said, some limited partners urged him to hire junior investors and build a bigger firm. He refused. He didn’t want to spend his days recruiting, managing, or firing people. He wanted to spend his time helping founders build companies from the ground up.
That hands-on style has earned him a nickname among some portfolio founders: “Better Call Zal,” a nod to “Better Call Saul,” the TV series about a lawyer people call when they’re in trouble. Bilimoria said the name started about three years ago, when a founder was negotiating a Series A and kept calling him for advice. After the tenth call in a single day, the founder told Bilimoria he had changed Bilimoria’s contact name in his phone to “Better Call Zal.”
“That is the call sign I was built for,” Bilimoria said. “I spend as much time with my founders as possible.”
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