One Way Ventures, a venture capital firm that backs immigrant founders, has closed its second fund at $57.5 million. The close comes three years after One Way announced its debut fund, a $28 million investment vehicle.
The new fund will allow One Way to grow their check size from $500,000 to $1 million, giving them the ability to lead institutional seed rounds at a faster clip, says founding partner Semyon Dukach. The bigger fund is par for the course now that the debut fund has been invested out, but also indicates how the seed boom is flourishing, forcing investors to recapitalize to stay competitive.
One Way is one of the few venture capital firms with an explicit focus on backing immigrant founders. Another firm that backs immigrants and helps them stay in the country is Unshackled Ventures, which last closed a $20 million fund in 2019.
Dukach says that the firm's immigrant focus is one of its biggest competitive advantages to get into deals. One Way says it brings together immigrant founders into one community and speaks the same language (metaphorically) of adapting to a new country, culture and environment. While COVID-19 has limited the opportunity to meet in person, the firm is experimenting with the concept of virtual HQs and events to bring together its portfolio companies.
Community and translation in a closed-door world such as venture capital is “the reason we will almost always get into the rounds,” Dukach said.
“We’ve been able to get into competitive rounds because we were treated like an angel who provides a lot of value, even when part of the value is just the feeling of being part of something really cool.”
OneWay's investments include Brex, Classtag and Chipper. Of its 48 portfolio companies, two companies don’t have an immigrant co-founder. The generalist firm has bets in machine learning, fintech and edtech prominently.
The immigration environment during the Trump administration, both from a rhetoric and policy perspective, has impacted One Way, albeit lightly, according to Dukach. The firm has a venture partner in Montreal, Philippe Kalaf, to hedge against potential policy moves.
As for closing a fund during a pandemic and election year, One Way closed nearly double the capital it initially planned to raise, adding to the parade of check-writing and cash in this year.
“We had a couple LPs hold off until after the election,” Dukach said. “They were more comfortable investing once Biden won.”
One Way is expectedly growing its team as it scores new capital. The firm expanded to San Francisco from Boston by adding Eugene Malobrodsky, the co-founder of a consumer privacy startup, as a partner.
The firm, similar to many venture capital firms, lags when it comes to the diversity of its decision-makers. Right now, all the partners at One Way are men. The firm plans to add Nadia Asoyan, former executive at Robinhood and current executive at Trusted Health, as a venture partner, which is different from a general partner. The venture partner role needs sign off from a GP in order to make a decision or write a check. Other female members of the team include Annie Patyk, a platform associate.
From a portfolio perspective, One Way has backed 10 female-founded or co-founded companies out of its 50 companies. Its portfolio also includes 19 companies with minority co-founders and seven companies with Black or Latinx founders.
The ideal founder, according to Dukach, embodies the firm’s name in their strategy.
“Someone who went one way, bought the ticket without having a company or any certainty of where they’re going to end up, without having the language or the culture or the network,” Dukach said. “Someone who emerges through that? It’s just more predictive of future success. It’s more predictive of being able to disrupt a big industry.”