Shiva and Monashees: $10 Million for Agile AI

The Brazilian startup Shiva, led by Lucas Marques, recently raised $10 million to invest in niche software startups. This fund, backed by the venture capital firm Monashees, is based on the belief that artificial intelligence enables small, diverse teams to compete on the global stage without requiring heavy funding.

Shiva is named after the Hindu god of transformation, reflecting its ambition to reshape the entrepreneurial landscape. It focuses on funding AI startups composed of one to three people, referred to as "Stars," by offering them monthly grants instead of massive initial investments. Each startup can receive up to $300,000, with an equity stake limited to 15%.

Lucas Marques, who grew up in a rural area of Brazil, was a partner and COO of the fintech Méliuz, which went public in 2020, marking one of the first IPOs of startups in Brazil. He firmly believes that AI can reduce operating costs and provide new opportunities for entrepreneurs from disadvantaged backgrounds. His experience with the NGO Programadores do Amanhã, which teaches programming to low-income students, has also influenced Shiva's vision.

The fund targets more modest yet profitable exits, ranging from $20 to $50 million, allowing for significant returns with reduced overhead. Marques emphasizes that a company generating $10 million in annual revenue, while not eligible for an IPO, represents a transformative potential for entrepreneurs from modest backgrounds. "This can change the entire city," he asserts.

AI startup founders and large tech companies are increasingly tending to form smaller, agile teams, prioritizing automation over hiring additional staff. Shiva will fund founders of niche software companies in the pre-seed stage for up to a year. If the companies manage to raise future funding, Shiva does not intend to remain invested long-term. Instead, it will sell its stake during secondary transactions to recycle capital back into the fund.

Shiva plans to support up to 100 startups, with a mentorship program and a community for founders. Currently, around 30 startups are participating in the testing phase, and funds will begin to be deployed in the coming months. Among the first supported startups, FoxApply, which automates job applications on LinkedIn, has already attracted around 600 international clients in two months.