SoftBank plans to invest $100 million in startups with minority founders
Out of left field, SoftBank is perhaps the first among VCs to dedicate a large dollar amount to their words of support.
On Wednesday, the Japanese telecom giant announced a $100 million Opportunity Growth Fund that will invest solely in companies founded by people of color. A portion of the gains from the fund’s investments will be donated to organizations “focused on creating opportunities for people of color,” while half of gains will be reinvested into subsequent Opportunity Growth Funds.
“We know that the venture capital community and tech industry have long lagged on diversity and inclusion,” wrote SoftBank COO Marcelo Claure. “When it comes to diversity, SoftBank absolutely has to do better as an employer, investor, and partner.”
SoftBank does not plan to include a management fee or a carry, and the language of the letter suggests that the company may be looking to loop in additional investor: Claure stated that the $100 million will be the “initial” size of the fund and SoftBank will serve as the “primary” Limited Partner.
Claure will lead the fund as CEO alongside Shu Nyatta, a Managing Partner who works on SoftBank’s Latin America-focused Innovation Fund. SoftBank also brought on board two prominent black figures in tech, TaskRabbit CEO Stacy Brown-Philpot and founder of TechSquare Labs Paul Judge, to sit on the investing committee.
The news comes as venture capital firms have condemned racism following George Floyd’s death (Including the likes of Accel, Benchmark, First Round and Kleiner Perkins) and some investors say they are seeking black entrepreneurs.
SoftBank itself is facing turmoil—and carries a battered reputation in the venture community. The company has strained its relationships over the past year as it sought to shore up its Vision Fund holdings, scrapping agreements to buy WeWork stock from the likes of Benchmark Capital and even walking away from deals.
The most busiest time of the year: Warner Music Group priced its IPO early Wednesday, kicking off 2020’s busiest week for new listings with a total of eight companies set to go public, according to Renaissance Capital. The entertainment company raised $1.9 billion by offering 77 million shares priced at $25 apiece, the higher end of its $23 to $26 price range.
Early-morning timing of the pricing may seem odd, given IPOs generally price the night before, and that was a conscious decision. Had Warner priced on Tuesday, the news would have clashed with a pledge from the music industry to pause normal activities to express solidarity with those protesting the death of George Floyd.
Meanwhile, ZoomInfo is expected to trade Thursday.
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