- Shruti Gandhi is quick on her feet as the sole general partner of her firm Array Ventures.
- She bets on startups she thinks will provide big returns, such as Simility and Zimperium.
- Read: "The Seed 40: The best early-stage women investors of 2024."
Shruti Gandhi has a simple rule for meeting founders: She only takes the meeting if she wants to invest.
"By my first meeting, I already know what I'm going to do," Gandhi said.
Before taking a call, she's already mapped the startup's market and has a point of view on what it will take for it to succeed. Being the solo general partner of her firm, the early-stage outfit Array Ventures, also means she can get deals done quickly.
In January, she met Nikhil Teja Kolli on a video call. His startup, MokSa.ai, lets store owners apply machine-learning technology to their security cameras to catch shoplifters. While other investors warned her of "a lot of dead bodies in the space," Gandhi believed in MokSa.ai enough that she agreed to invest before they hung up the call.
"She came prepared knowing our market, tech, competitors, customers. We dove into go-to-market strategy before I had even begun my pitch," Kolli said. It was "a no-brainer decision to work with her."
Gandhi has built an impressive track record with that approach. Over the past five years, she's returned most of her maiden $7 million fund to limited partners at a net multiple of almost four.
A parade of exits — 15 out of 75 investments for Array — has sped along those distributions. Her home-run investments include Simility, a machine-learning-based software service to help online merchants spot fraudsters, which sold to PayPal in 2018 for $120 million just two years after Gandhi invested, and Zimperium, a mobile-security platform that sold to a private-equity firm for $525 million in 2022.
Her first fund has a handful of startups still in the cooker, such as Solugen, a carbon-negative chemicals startup that's raised over $640 million in funding to date, and Openprise, a sales software firm that nabbed $25 million in Series B funding this March. Gandhi predicts future exits will take this fund to a holy-grail net multiple of 10.
It's no secret that limited partners are eager to get their cash back. The slower pace of startup exits in recent years has contributed to a liquidity crunch for pension plans, endowments, family offices, and other entities that write the big checks into venture funds. Given her rate of return, Gandhi is in a league of her own.
Becoming an investor wasn't always the goal
Gandhi moved from India to Poughkeepsie, New York, when she was 17 years old. A self-taught coder, she landed a $6-an-hour job in the computing lab at a local liberal-arts college. Even without standardized test scores, she persuaded the admissions office to enroll her and front her a year's worth of credits for her studies in India.
By the end of her sophomore year, she worked full time as a software engineer at the big game in town: IBM. She joined a skunkworks project to upgrade the software of the company's IT system, and she went on to file six patents related to instant messaging, cloud calling, location-based services, and other tech.
She spent a decade at the computing powerhouse while earning her master's degree at Columbia University and socking away part of her salary with the goal of starting her own company someday.
Gandhi knew then an explosion of data could unlock new ways for people to interact with friends. Her startup, Penseev, named for the magical device Professor Dumbledore used to replay memories in the Harry Potter books, compiled data from social networks to create visual timelines of people's lives. The startup, though, struggled to attract investors, Gandhi said. In 2011, she wound it down.
Then, a lightbulb turned on. If Gandhi couldn't raise funding, she could become the checkwriter. In doing so, she said she could "reverse engineer" what it takes to build a venture-backed company.
Through stints at True Ventures and Samsung Next, the chipmaker's venture arm, she showed a flair for spotting founders she calls the "agitated workforce" — people who are deeply frustrated at work because the tools they're using aren't cutting it. They're so skilled and motivated that when they can't find a better solution, they build it themselves, Gandhi said. That's where she steps in.
She's typically one of the first to write a check to a founder, trusting them even before other investors have spotted the opportunity.
"The greatest service you can do for someone is seeing the potential in them when they don't see it themselves," Gandhi said of being an early investor.
For founders, by founders
The founders Gandhi has backed like working with her because of her technical chops and hands-on approach. Champ Bennett, whose pandemic-born video-startup Capsule is backed by Array, said Gandhi is something of a stealth weapon. "People who are really talented but also underestimated tend to be the ones who roll up their sleeves and work the hardest," he previously told BI.
Just as Gandhi was considering leaving her job at True Ventures to start another company, founders she had interacted with — including Zimperium's Zuk Avraham and Mehul Nariyawala, who sold his startup, Flutter, to Google — encouraged her to raise a fund instead.
"These folks said, 'You went to bat for us. We will back you if you raise a fund,'" Gandhi said. She made the leap.
Since 2016, Array has raised three funds and a raft of special-purpose vehicles, allowing her to pool more money for investments. Each fund boasts about 30 limited partners, including institutional investors and high-profile family offices, along with professors from the University of Chicago Booth School of Business, where she got her master's. In her latest and third fund, she noted that over half of the entrepreneurs in her portfolio threw their own money into the pot.
Gandhi closed $75 million across the third fund and a vehicle for follow-on investments, bringing the firm's assets under management to $150 million.
Five years ago, Doktor Gurson met Gandhi as he and his cofounder were wrapping up the process of raising money for their young company, Rad AI, which gives radiologists access to cutting-edge technology like generative AI. Gurson recalled how Gandhi homed in on their "optimistic view of how it could all progress." She walked them to the elevators and then stopped them.
"I love what you guys are doing. I've done my own research to understand the space. I want to get this done," she told them.
"Why don't we just handshake on this?"
They shook on the deal. "I don't like to waste founders' time," Gandhi said.
Correction: May 7, 2024 — An earlier version of this story misstated the status of Array Ventures' third fund. It has closed $75 million.
