Y Combinator Veteran Launches $34M Fund to Invest Exclusively in YC Startups

When Kulveer Taggar helped build Auctomatic back in 2007, few could've predicted his future would circle back so tightly around the world of Y Combinator. Nearly two decades later, Taggar isn’t just a YC alum—he’s emerging as one of its most focused backers.

His newly launched venture, Phosphor Capital, has quietly closed $34 million across two funds. But this isn't just another early-stage capital pool—it’s designed entirely for YC startups, with Garry Tan, current CEO of Y Combinator, listed among its backers.

A Founder-Turned-Backer, With Skin Still in the Game

Taggar’s credibility isn’t theoretical. After selling Auctomatic in his early 20s, he returned with Zeus Living, a proptech startup that hit $120M in ARR and a $200M valuation. Even as Zeus merged with Blueground in 2023, Taggar was already laying the groundwork for what would become Phosphor.

He didn’t need to cold-pitch LPs—most of the money came from Zeus investors, family offices, and YC insiders. There’s deep alignment in the DNA.

What Phosphor Capital Is Actually Doing

• Only YC startups: No exceptions. If you're not in the YC ecosystem, you're not getting a check.
• Small bets, wide net: Phosphor is writing $100K–$500K checks, and has already backed 200+ companies, including generative AI startups like Gumloop and productivity tools like Circleback.
• One-man operation: Taggar is the sole GP. This isn’t a committee—it’s personal, fast, and streamlined.

Not a Trend—A Targeted Thesis

In a tech landscape where solo VCs are in vogue, Phosphor stands out for its hyper-specific thesis. It’s not sector-specific (though Taggar is clearly bullish on AI), but community-specific—backing startups with YC’s operating rhythm, cultural fluency, and founder mindset.

“You’re not just betting on companies,” Taggar noted in a recent conversation, “you’re betting on the machine that’s producing them.”

The Garry Tan Connection: More Than Optics

Having Garry Tan—YC’s CEO and former co-founder of Initialized—as a backer does more than signal credibility. It opens doors. Tan is reshaping YC in his own image, with greater focus on AI, product quality, and global reach. Phosphor is, in effect, riding shotgun with that evolution.

As Tan tweeted recently:

“If you’re building something from a place of understanding and speed, Kulveer’s probably already seen it before you hit send.”

Why Now?

• AI gold rush: YC’s last two batches were loaded with AI founders.
• Venture funding tightrope: Founders still need early-stage capital that moves fast and doesn’t drown them in bureaucracy.
• YC’s expanding role: Under Tan, YC is becoming more hands-on, with products like Work at a Startup and Startup School driving year-round engagement. A fund like Phosphor sits perfectly within that orbit—but doesn’t need to be owned by it.

What to Watch in 2025 and Beyond

• Follow-on dynamics: Will Phosphor raise a larger Series A-focused vehicle or stay lean at seed?
• Taggar’s involvement: Will he remain solo forever, or bring on partners as deal flow scales?
• Formal YC alignment: With Garry Tan’s name attached, speculation will rise—will YC and Phosphor collaborate more deeply or remain adjacent?

Final Thought

In a market cluttered with spray-and-pray seed funds, Phosphor Capital is the rare case of strategic loyalty. It’s a founder betting on a system that built him, at a time when loyalty to founder ecosystems is both rare and incredibly valuable.

If you’re a YC founder raising early capital, there’s a decent chance your first check might now come from someone who’s sat in your seat—and isn’t waiting for a demo day to act.