SoftBank Group Corp. has started a US$100 million fund that will exclusively invest in companies led by people of color, a group that’s historically been underrepresented in the venture capital industry.
Marcelo Claure, SoftBank’s chief operating officer, will lead the fund alongside Shu Nyatta, a managing partner who works on the company’s Innovation Fund, according to a statement from the company on Wednesday.
The fund will specifically look to support founders from communities that face “systemic disadvantages in building and scaling their businesses,” it said.
The effort by Japan’s SoftBank stems from a reaction to protests sweeping the U.S. this week after George Floyd, an unarmed black man, died after a white Minneapolis police officer knelt on his neck for more than eight minutes.
SoftBank and its Vision Fund have been a major backer of many Silicon Valley startups over the years.
The new Opportunity Growth Fund fund will be managed by SoftBank Group International, based in San Carlos, California.
The company said it will also adopt a diversity initiative internally and highlighted its Emerge program, which offers mentoring to entrepreneurs from underrepresented groups. The fund’s existence was earlier reported on by Axios.
“VC-backed startups are overwhelmingly white, male and Ivy-league educated and based in Silicon Valley,” Claure said in a letter to employees, noting that just 1 per cent of VC-backed founders are black.
The Opportunity Growth Fund will be the biggest fund providing capital to black Americans and people of color, he said.
Part of the gains will be donated to “organizations focused on creating opportunities for people of color” and 50 per cent will be reinvested in subsequent Growth Opportunity Funds, SoftBank said.