<p><img src="https://static5.businessinsider.com/image/60b6cd85bee0fc0019d5abfd-966/Zal Bilimoria Refactor Capital.jpg" border="0" alt="Zal Bilimoria Refactor Capital" data-mce-source="Refactor Capital" data-mce-caption="Zal Bilimoria is the sole general partner at Refactor Capital."></p><p></p><bi-shortcode id="summary-shortcode" data-type="summary-shortcode" class="mceNonEditable" contenteditable="false">Summary List Placement</bi-shortcode><p>Solo venture capitalist Zal Bilimoria has raised a new fund, and he hasn't even fully spent his previous one, he tells Insider.</p><p>Bilimoria is the sole partner at Refactor Capital and has now closed $50 million for his third fund, Insider has learned. The new fund will be used to place bigger bets on seed-stage companies in biotech and healthcare, as companies in those areas <a href="https://www.businessinsider.com/6-investment-firms-that-placed-the-most-healthcare-bets-q1-2021-5">raise huge rounds of funding</a> often from hedge funds and multi-stage firms at soaring valuations.</p><p>"There's just a flood of capital, and it's caused an inflation of round size at every single stage. Seed is no different," Bilimoria said.</p><p>Refactor is still investing out of its second, smaller fund, he said, but it will start spending from the new fund in July.</p><p>Founded in 2016, Refactor backs companies that use software and technology to "build a happier, healthier, and more habitable world," according to the firm's newly revamped website. It invests in relatively niche areas such as digital therapeutics, enterprise software for healthcare systems, and computational medicine, with a sprinkle of climate tech.</p><p>The portfolio includes PathAi, a startup using artificial intelligence to improve medical diagnostics, and Avail, whose telemedicine software helps surgical staff learn how to use new medical devices. The firm's largest investment so far is Solugen, a chemicals company that's on a mission to replace petroleum-based chemicals with plant-based substitutes.</p><p>Before Refactor, Bilimoria spent two years at Andreessen Horowitz, where he led some of the firm's early investments in biotech companies, including Omada Health, Honor, and Benchling. Those deals laid the foundation for the <a href="https://www.reuters.com/article/us-venture-andreessen-newfund/venture-firm-andreessen-horowitz-launches-200-million-bio-fund-idUSKCN0T71LZ20151118">Bio Fund</a>, one of the firm's first specialized funds, but Bilimoria left Andreessen Horowitz shortly after the fund was announced.</p><p>Still, Bilimoria credits the startup founders he met at that job with showing him how his background in software and product management at Google, Netflix, and LinkedIn could be helpful in spinning up a biotech company.</p><p>He joined with David Lee, a former Google executive who is now Refactor's chairman, to start their own venture firm.</p><p>The firm went on to raise $50 million for its first fund and $30 million for the second. Lee stepped down as managing partner and became chairman in 2019, before the firm closed a second fund, leaving Bilimoria as the sole partner.</p><p>Last November, Bilimoria began calling up Refactor's investors, known as limited partners in the venture world, to gauge their interest in another fund. They were so interested that he boosted the target fund size from $40 million to $50 million and had 90% of the money committed by Christmas, Bilimoria said.</p><p>The experience was unlike his early days launching his firm. The first two fundraises he did were "absolute grinds," Bilimoria said. This time, he had to turn down offers to invest in order to keep the fund size relatively small. Fifty million was as much as he could manage as a solo capitalist.</p><p>"I want to be a solo partner for the rest of my career," he said.</p><p>The firm's limited partners include longstanding backers such as Marc Andreessen and Chris Dixon, both from his old stomping grounds Andreessen Horowitz, as well as Jeff Dean, the well-known engineer who oversees Google's research and health divisions. His investors also included new LPs like a hospital group and a prominent commercial real-estate firm that owns biotech laboratories across the country, which Bilimoria declined to name.</p><p>Bilimoria plans to invest even more heavily in biotech and healthcare with the new fund. The pandemic tailwinds are still boosting both sectors, he said. Startups in healthcare raised $31.6 billion in the first three months of this year, according to a <a href="https://www.cbinsights.com/research/most-active-healthcare-vcs/" data-analytics-module="body_link" data-analytics-post-depth="40" data-uri="d758d5dca6cf7bcb88a823150ff3f8e6">recent report from CB Insights</a>. And the majority of digital health funding measured in the number of deals came from just eight venture firms in the US, including Tiger Global, <a href="https://www.businessinsider.com/6-investment-firms-that-placed-the-most-healthcare-bets-q1-2021-5">Insider's Megan Hernbroth reported</a>.</p><p>Bilimoria said he's not intimidated by the arrival of multi-stage firms in seed-stage investing.</p><p>"It adds fuel to the fire for our companies," he said.</p><p><em data-stringify-type="italic">Are you a venture-capital insider with insight to share' Contact </em><em data-stringify-type="italic">Melia Russell</em><em data-stringify-type="italic"> via email at </em><em data-stringify-type="italic">mrussell@insider.com</em><em data-stringify-type="italic"> or on Signal at (603) 913-3085. Open DMs on Twitter <a href="https://twitter.com/meliarobin'inline-read-more" data-analytics-module="body_link" data-analytics-post-depth="100" data-uri="69c976bb313404055215ca867a0f6947">@meliarobin</a></em><em data-stringify-type="italic">.</em></p><p><a href="https://www.businessinsider.com/refactor-capital-zal-bilimoria-raises-third-solo-fund-2021-6#comments">Join the conversation about this story »</a></p> <p>NOW WATCH: <a href="https://www.businessinsider.com/how-the-1999-russian-apartment-bombings-led-to-putins-rise-to-power-2018-3">How the 1999 Russian apartment bombings led to Putin's rise to power</a></p>
Click here to read full news..
