SoftBank creates a $100M fund to invest in companies founded by ‘people of colour’
The Opportunity Growth Fund by SoftBank will focus on businesses which are created by African Americans and Latino entrepreneurs in the US.
SoftBank has announced the creation of $100 million Opportunity Fund that aims to invest only in those companies which are led by people of colour.
The fund will be led by SoftBank’s Chief Operating Officer Marcelo Claure who, in a letter to employees, stated, “we have to put money behind it, set plans, and hold ourselves accountable,” a report from Reuters said.
The fund will be named “Opportunity Growth Fund” and will be focused on African-Americans and Latinos in the US.
The United States is on a boil with protests across the nation in response to the police custodial death of George Floyd, an unarmed black man.
The new fund SoftBank will invest in entrepreneurs from communities that face systemic disadvantages in building and scaling their businesses.
Masayoshi Son, Founder and CEO, SoftBank
The fund will start with $100 million of its own capital and could grow with more investments. Still, the fund pales in comparison to SoftBank’s Vision Fund of $100 billion, which is designed to invest heavily in high-growth startups.
SoftBank will not take a traditional management fee, the company said in a statement. Half of its gains will be reinvested into subsequent Growth Opportunity Funds. The company will also donate a portion of its gains to organisations that create opportunities for the people of colour.
SoftBank Founder Masayoshi Son, in a post on Twitter, said, “Racism is a lamentable thing,” and ended the post with the hashtag #blacklivesmatter.
SoftBank is also looking to establish a “dedicated diversity and inclusion programme”.
SoftBank also said that it will match all personal donations, up to $1,000, to support nonprofit organisations that fight racism and discrimination.
SoftBank’s management is overwhelmingly male, with the company planning to nominate its first female board director at a shareholder meeting later this month. While spanning a wide range of nationalities, only four of 30 investors listed on Vision Fund’s website are female.
Edited by Kanishk Singh