Marcos Bretón

Opinion: Folsom venture capitalist nurtures Sacramento-area companies

Lokesh Sikaria’s company, Moneta Ventures, has invested about $8 million in growing businesses and recently got an investment from Sacramento Republic FC co-owner Kevin Nagle.
Lokesh Sikaria’s company, Moneta Ventures, has invested about $8 million in growing businesses and recently got an investment from Sacramento Republic FC co-owner Kevin Nagle. bnguyen@sacbee.com

The rap on Sacramento is that there’s no money here for investment. There are no avenues for young entrepreneurs to succeed short of renting a van and moving to San Francisco, Silicon Valley, Seattle, Chicago or some other large city awash in capital. It’s been said many times that Sacramento is hostile to business and will be forever tethered to the boom-and-bust nature of government employment in all its drab forms.

“I disagree with that big time,” said Lokesh Sikaria. He’s at the forefront of a movement to make Sacramento a place where wealth is created and young companies can secure investments allowing them to grow here. Sikaria is managing partner of Moneta Ventures, a Folsom venture capital firm with a fund of $25 million.

That’s a modest amount by Silicon Valley standards, but in the Sacramento region, there’s no other entity poised to invest that much money in local technology firms. Already, Moneta has disbursed about $8 million. Last week, it got a high-profile boost in the form of an investment by Kevin Nagle, managing general partner of the Sacramento Republic FC soccer team and a minority owner of the Kings.

“What made me smile is that most of the companies they have invested in (so far) have been from the Sacramento region,” said Nagle, who just sold EnvisionRx, the drug-benefit company he co-founded, for $2 billion. “I think that is really important because there is a belief by many that you have to relocate to the larger cities, the financial centers.”

Of the $8 million Moneta has already invested, $6 million has gone to local tech firms, including 5th Planet Games, a Rocklin-based online game publisher; Kura MD, a Roseville medical technology company; and Homezada, a digital home-information platform based in El Dorado Hills.

Moneta doesn’t just hand out cash. The money comes with business oversight from Sikaria, who said he will step in and help run a company if he doesn’t think management is doing a good job.

Moneta is going to invest its remaining funds over the next three years in companies currently generating between $500,000 and $5 million a year in revenue. The plan is to help get those companies to a place where they’re producing $50 million to $75 million in annual revenue before they either go public or are sold to the highest bidder.

“I was recently asked the question: ‘Are you focused on the region?’ ” Sikaria said. “I answered, ‘No, I am focused on making money for my investors. But if we accomplish that, it will do the region a tremendous amount of good.

“If we can do it, we can lay to rest thoughts that it can’t be done in Sacramento,” he added.

Sikaria looks younger than his 43 years. A Hindu educated in Catholic schools in India, Sikaria was taught by a charismatic priest to think big.

He was taught in the best traditions of the Catholic faith by the disciples of John Bosco, a 19th-century Italian priest who dedicated his life to educating poor and disadvantaged youths. In the last century, the Salesians of John Bosco, a religious order known for establishing schools and orphanages around the world, have followed the philosophy of raising and educating youths to aspire.

Sikaria was not destitute like so many young people from his remote county of Assam in northeast India. His father and hero, Murari Sikaria, was a prominent businessman who imported wheat and ran other ventures. But Sikaria said he still might never have left India if it weren’t for the influence not only of his father but also a priest named V.M. Thomas, who still teaches young people in the area where Sikaria grew up.

“Most people where I’m from never even emigrate to (larger cities) in India, much less the United States,” said Sikaria with a joyous, infectious laugh that echoed inside his office on a side street in Folsom.

By eighth grade, Father Thomas had inspired Sikaria to become a leader in a group of young people affiliated with the Rotary Club. They helped build an orphanage to further the mission of Mother Teresa.

“I have a picture of me with Mother Teresa, but I didn’t have a big appreciation of who she was,” he said. “It wasn’t until later, after I came to the United States, that I thought, ‘Wow, that was Mother Teresa.’ ”

Since then, Sikaria said he has worked to make good on the teachings that shaped his life. He landed at UC Berkeley in 1989, at the age of 18, because he had heard it had a great engineering school. But he found that engineering left him cold. It was the team-building aspect within the business world that appealed to his heart. And it was intellectual rigor and discipline of deciphering why businesses don’t work and turning them around that hooked him.

A job at Price Waterhouse led him to Folsom 20 years ago. When that job was done, his bosses wanted to move him, but he wanted to stay put. “It’s so beautiful here,” he said of the place where he is raising two daughters with his wife, Chanda.

He took a job with a Pennsylvania-based information-technology company called Rapidigm that had a small office in Folsom. It grew from $25 million in revenue to $300 million by the time it was sold to a Japanese company, Sikaria said. Then he founded Sparta, a technology consulting firm that went from zero to $125 million in revenue.

In each job, Sikaria’s firms confronted inefficiencies and made their money by figuring out how to build companies to scale. His approach combines the aspirational fervor of his upbringing with the cold discipline of business in the 21st century.

It all led to starting a venture capital firm and planning a kind of revolution that Sacramento needs more than any other. It’s a revolution of investing, making and keeping money right here so it can make more money. So it can create greater expertise. So it can build Sacramento into a place that isn’t tethered to government work and isn’t lacking for confidence.

A lot of smart people have talked about such things to no avail. Sikaria is doing it and – he hopes – inspiring others to follow and create a new culture of success.

“Success breeds success,” he said last week. “The quality of life is really good here. We have all the ingredients. They become part of an ecosystem where we create a collaborative environment to make sure we all prosper together.”

Call The Bee’s Marcos Breton, (916) 321-1096.

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