GV spinout Plexo Capital closes $42.5 million fund

Plexo Capital, the fund founded by former GV partner Lo Toney, has closed its first fund of $42.5 million. The plan is to invest in both startups and emerging VC funds, with 60% to 65% of the capital going toward venture capital funds as a limited partner, and 35% to 40% going directly to startups, Toney told TechCrunch.

In addition to investing as LPs, Plexo Capital will make direct investments in some startups that are funded by firms where Plexo has an LP position.

While Plexo Capital plans to invest in all types of startups and founders, its thesis is that “women and people of color inherently have differentiated networks and a different lens to evaluate deals,” Toney said in a statement. “This is very important at the seed stage, as it leads to a deal flow that is differentiated, and enables us to pursue deals that require an intimate understanding of certain problems or market opportunities in the absence of an abundance of data. Women and people of color bring this to the table.”

The fund’s investors include Alphabet, Intel Capital, Cisco Investments, the Royal Bank of Canada, Kapor Capital, the Hampton University Endowment and the Ford Foundation.

Before launching Plexo Capital, Toney incubated the fund inside GV for a couple of years. For GV, this was a way for the fund to source additional deals. Moving forward, GV will continue to have a working relationship with Plexo Capital.

“One of our aims at GV is to increase access to differentiated deal flow,” GV Managing Partner David Krane said in a statement. “In 2018, Lo and I worked together to build this strategy into an independent fund. We’re proud of everything Lo and his team are building at Plexo Capital, and we’re excited to see the impact of this work with a diverse set of investors and entrepreneurs.”