South Loop Ventures, a Houston-based VC Firm Secures $21M to Support Diverse Founders

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Published by Stephen Oluwadara at May 21, 2025

South Loop Ventures is Redistributing US Capital

Founded in 2022, by Zach Ellis, South Loop Ventures is a venture capital investment firm headquartered in Houston, Texas. The firm seeks to invest in the energy, climate, space, sports, health, fintech, business-to-business, and software-as-a-service sectors.

According to its website, the venture company was created to seize opportunities stemming from the inefficient distribution of capital in the United States. This market inefficiency ignores the unique backgrounds and experiences of underrepresented talent, enabling them to offer solutions to market problems that others cannot.

Houston is one of the nation’s most diverse cities, ranking fifth. Speaking to TechCrunch, the firm’s founder and managing director, Zach Ellis, said, “Given Houston’s diversity, we thought it was important to have a fund focused on diverse founders here in Houston.”

South Loop Ventures focuses on seed and pre-seed companies, with an average check size of $400,000. It also primarily hopes to support founders of color. So far, South Loop has made 13 investments and hopes to invest in at least 30.

Meet South Loop’s Zach Ellis

Despite his growing love for Houston, Ellis hails from New Orleans and began his career as an active duty officer in the US Navy. “I’ve always been a very mission-driven person, so after serving seven years active duty in the Navy, I transitioned to the corporate sector.”

That led him to work as a healthcare consultant, which later exposed him to a corporate innovation group. That group taught him how to use technology to help people with the mundane aspects of everyday life.

After a while, Ellis transitioned into the corporate venture team at PepsiCo, where he performed a mix of technology scouting, corporate partnerships, and investing in food and agriculture-related funds. From there, he moved to commercializing research at Ohio State University, where he helped manage a pool of money to later invest in Midwest-focused VC funds and startups spun out from the college.

The George Floyd murder issue happened around this time, and he started to reflect on his career. “I reflected on my career and the impact I was having and the fact that I was often the only Black or brown face in any room that I was in,” he told TechCrunch. “I wanted to do something about it.”

Coincidentally, during this time, he received a call from a friend in Houston, who told him that the city was working to raise its profile in tech and innovation. This friend, in particular, said many stakeholders had an appetite to support a fund backing founders of color. He had already told many of them that Ellis would be the perfect person to lead one. So, Ellis came down to Houston and launched the idea for South Loop Ventures.

South Loop Ventures is Making Capital Accessible To Everyone

Despite fundraising challenges caused by market conditions and DEI rollbacks, Ellis completed the process in 24 months, aided by connections through Mercury Fund. Rice Management Company and Chevron Technology Ventures led the funding round. Texas Capital Bank and The Great Commission Foundation of the Episcopal Diocese of Texas also participated in the round.

He aims to attract tech talent to Houston and empower diverse founders to build successful ventures. South Loop Ventures’ new fund will invest in founders nationwide, though Ellis claims they’ll prefer sectors that “reflect the industrial strength of Houston,” such as healthcare, energy, space, and climate.

“We strongly believe that venture capital should be accessible to everyone and that underinvested and diverse teams offer a unique opportunity for significant returns,” he said.

So far, South Loop ventures has made 13 investments and hopes to invest in at least 30. Some startups in its portfolio include Kulture, LunchTable, Upgrade, Lokum, Milkify, and Astronaut.

Main Image: Zach Ellis. Image Credit: South Loop Ventures