SoftBank has launched a $100 million fund to support ventures led by black people and other minority groups in light of the global uproar against racism. The new Opportunity Growth Fund will support founders from communities that face systemic disadvantages in business. A statement from the company said that it “will only invest in companies led by founders and entrepreneurs of color.”
The move is a symbolic stride, given how recent events have directed attention to the era of power imbalance among races. Softbank COO Marcelo Claure noted similar imbalance in the statement;
“VC-backed startups are overwhelmingly white, male, and ivy-league educated based in Silicon Valley. Only 1% of VC backed founders are black.”
Nevertheless, this Opportunity Fund barely compares to Softbank’s $100 billion Vision Fund and $2 billion Innovation fund. However, it shows a strategic interest in Softbank’s future investments and support for racial minorities. The company will reinvest 50% of the gains from the Fund in subsequent growth funds. Additionally, it will donate part of the gains towards “organizations focused on creating opportunities for people of color.”
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Earlier, CEO and Founder of Banjo, one of Softbank’s portfolio companies, resigned after revelations of his previous ties with KKK. Decisions on the nature of companies it invests in are therefore essential and send a message.
The company’s recent move is not its only sign of alliance with African Americans. Claure’s memo reveals that the company will pursue diversity in its investment and hiring decisions. TechCrunch notes that they will establish a diversity program to improve diversity in its leadership and board seats. Moreover, the company is encouraging its employees to donate to initiatives combating racism, promising to match donations up to $1000.
