L’Attitude Ventures, a venture fund focused on Latino-founded start-ups, has closed on $100 million for its sophomore fund from a host of major investors, including JPMorgan Chase, an anchor in the vehicle.
“We closed on 22 LPs in Fund II with a balanced distribution, just under half being corporates and the rest comprised of family offices and one major university endowment,” firm CEO Sol Trujillo tells Venture Capital Journal. “We admitted our first LP in mid-August of last year, so we’ve finished fundraising ahead of our one-year mark. We were fortunate to have strong endorsements from major brands early, like JPMorgan, Bank of America and Cisco Investments, which validated our thesis and team. It also helps that our GP commitment and conviction is strong, with over $10 million committed.”
Other investors in L’Attitude Ventures II include Barclays, MassMutual, Nuveen Investments, Polaris Limited Partners (Oscar Munoz), Royal Bank of Canada and UC Investments.
L’Attitude, based in San Diego, launched in 2019 and closed its debut fund the following year for an undisclosed amount.
The firm is comprised of Trujillo, the onetime chief executive of Orange, Telstra and US West; president Gary Acosta, co-founder and CEO of the National Association of Hispanic Real Estate Professionals; and partners Kennie Blanco, a former investor at BlackRock; Laura Moreno Lucas, a former managing director at Nasdaq; and Oscar Munoz, former CEO of United Airlines.
“Part of our differentiation to founders is our unique team, which has global leadership experience, deep technical expertise, and most importantly, a network and platform that can deliver meaningful access and visibility,” Trujillo says. “Kennie and Laura focus on our pipeline and investment selection, while Oscar, Gary and I focus on how we can catalyze these companies with our deep operating experience and networks to create an asymmetric risk return profile. All of us comprise the investment committee and we look for unanimity when making a final investment decision.”
The firm is already looking toward the future. “The long-term ambition of L’Attitude Ventures is to consistently be the first major source of institutional capital for Latin(a)o founders and, given the growth of this cohort, we’re going to need a lot more capital,” Trujillo says. “With demonstrated performance, we hope to raise a $500 million Fund III in two to three years, followed by another sizable fund and so on. In 10 years, we should have a multibillion-dollar AUM firm that will endure for many generations.”
To those that say top-quartile returns cannot be produced by focusing on a particular demographic, Trujillo says: “We not only know the pipeline of Latino founders is large and growing, where Latinos represent one in four net new businesses in the US, but also know these businesses are in industries that tend to generate top-quartile returns.”
Trujillo’s goal for the fund is to achieve an aggregate net return of 3x invested capital.
He sees no shortage of Latino entrepreneurs with promising companies that need seed capital.
“According to a 2021 report by the Stanford Latino Entrepreneurship Initiative, 19 percent of the Latino-owned employer businesses create, develop, and sell a technology or software products compared to 14 percent of white-owned employer businesses,” he says. “And within those percentages, the Latino businesses have a greater concentration in AI, cloud-based solutions, specialized software, robotics and specialized equipment, which goes against the widely held belief among the general investment community that Latinos entrepreneurs are not in technology.”
L’Attitude has described Latinos as “the most underinvested and undercatalyzed demographic, with tremendous existing and future growth… Their total economic output in 2019 was $2.7 trillion, yet they receive less than 1 percent of all invested capital by private equity and venture capital.”
Other than L’Attitude, which is also known as LAT VC, there are not too many funds with a narrow focus on Latino-founded companies. Venture firm Beta Boom recently compiled a list of 35 Latino-led VC funds (where at least one partner identifies as Latino or Latina); however, just a handful of those funds are dedicated to investing in Latinos.
Among them are Debut Capital, which makes pre-seed and seed investments in Black, Latinx, and Indigenous founders; Epakon Capital, which makes seed and early-stage investments in Latinos and Latin America; Leap Global Partners, an early-stage investor focused primarily on “Latinx founders and startups that view Latinx markets as critical to their long-term success”; and VamosVentures, which makes pre-seed and seed investments in diverse founders, including Latinos.
L’Attitude’s Fund II has so far backed 22 companies. It focuses on investments of $200,000 to $2 million in early-stage businesses led by Latinos. It is especially interested in technology-based solutions aimed at areas such as workforce development, healthy communities, media and e-commerce, “educational attainment” and financial advancement. Companies seeking investment must be at least 25 percent owned by US Latinos.
The firm’s portfolio includes Agua Bonita, which sells canned agua fresca from “rescued fruit” with no added sugar; Deepblocks, which makes software to automate the real estate development process; and Progeny Coffee, which operates an e-commerce site that sells coffee from Colombian farmers.
“In each fund, we will invest in 30 to 40 companies; however, we are not just keeping count of founders, we are counting Latino board members, Latino investors on the cap table, Latino employees, and nurturing the next generation of Latino GPs,” Trujillo says. “This is only the beginning and we’re excited to be a major participant in this new wave of US entrepreneurship.”