May 23, 2022

SoftBank, a Japanese conglomerate, today announced that it has an unlimited evergreen fund created specifically to support black, Hispanic and Native American entrepreneurs in the United States. The pledge is a continuation of SoftBank’s $100 million Opportunity Development Fund for underrepresented founders, which was first launched in June 2020 “due to increased racial equity.”

The company says it took 24 hours and is now fully invested in 70 companies. About 55% of the companies in the original portfolio are black founded, 40% are Hispanic, and 5% are black and Hispanic. However, the portfolio weighs heavily on men, with only 13% of the companies in SoftBank Opportunity’s portfolio being founded by women of color, higher than the national average but still far from equal.

The Opportunity Fund also includes four companies worth over $1 billion plus two exits; Half of the portfolio has been raised after the initial investment or is in the process of raising a new round of funding. This momentum may be one reason why SoftBank is continuing its efforts. In other words (surprisingly), it works.

The question is why SoftBank is switching its commitment to a green fund rather than an obvious spending bucket, and thus is an overwhelming gesture of support for entrepreneurs that has historically been ignored. He’s not afraid of the numbers: Just four months ago, SoftBank gave $3 billion in additional capital to Latin American companies.

Evergreen funds have an open structure with no expiry date. The strategy could allow companies to reuse capital regardless of actual returns and invest in multiple tranches and possibly share ownership. In that case, SoftBank plans to return to the same early-stage startup scene that Tiger Global has taken in recent weeks.

There is no set amount of capital that SoftBank has committed to the group, making it difficult to know what impact this commitment will have. SoftBank told Forbes that the team plans to inject more capital than the debut fund. In an email to gaming-updates, the company said it would make 20 to 30 investments per year with $300,000 to $700,000 in checks and $1 million to $5 million in follow-on funding.

Marcelo Claire, former COO of SoftBank, was the man who originally conceived and launched the Opportunity Fund, along with managing partner Shu Nita, Paul Judge, founder of TechSquare and president of Pindrop, and Stacey Brown-Philpott, CEO of TaskRabbit. . Claire left SoftBank earlier this year due to a tense dispute with the company over her compensation. Nyatta currently chairs the Opportunity Fund and has appointed managing partners Katherine Lenson and Brett Rockkind to the investment committee.

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