• Brazilian startup fund Shiva has raised $10 million to invest in niche software startups.
• Founder Lucas Marques is betting that diverse, tiny teams can compete on the global stage.
• Shiva will fund founders with monthly grants, capping each investment at $300,000.

A Brazilian startup fund is betting that AI has made large headcounts and funding rounds unnecessary to compete on the global stage.

Shiva, named for the Hindu god of transformation, has raised $10 million to back AI startups of one to three people — which it calls "Stars" — and arm them with monthly stipends rather than large, upfront checks.

Brazilian entrepreneur Lucas Marques founded Shiva, backed by venture firm Monashees. He believes AI can create opportunities for founders from disadvantaged backgrounds by dramatically reducing operating costs.

AI startup founders and Big Tech companies have increasingly shifted to forming smaller, nimble teams, favoring automation over hiring additional staff.

Marques grew up in rural Brazil and served as a partner and COO at fintech company Méliuz, which went public in 2020 as one of Brazil's first startup initial public offerings. Shiva grew out of his work building an NGO called Programadores do Amanhã (Tomorrow's Programmers), which teaches low-income students how to code. Shiva will similarly back entrepreneurs from diverse backgrounds, he said.

Shiva will fund founders of pre-seed-stage niche software companies for up to a year, with total funding per company capped at $300,000. In exchange, it will take an equity stake in each startup, capped at 15%.

Marques said smaller, profitable exits — in the $20 million to $50 million range — can still generate strong returns with minimal overhead.

Take a company with revenues of $10 million a year.

"It's not a unicorn; it's not enough to make IPO," Marques said, "but it's an amazing company for a guy from a poor background. It can change the whole city."

If companies go on to raise future funding, Shiva doesn't intend to stay invested long-term and will instead sell its stake in secondary transactions to recycle the capital back into the fund.

Shiva also offers mentorship and community for founders. It is in a testing phase with about 30 startups, Marques said, and it will begin deploying funds in the coming months.

One early startup in the program is FoxApply, which automates LinkedIn job applications. It has amassed roughly 600 international customers within two months, Shiva said.

Ultimately, the fund aims to back 100 startups and will continue to welcome others on a rolling basis.

Here's a look at the pitch deck Shiva used to raise $10 million. One slide has been edited so that the deck can be shared publicly.