In June 2020 we wrote about SoftBank Group after the Japanese conglomerate launched a $100 million fund called the “Opportunity Growth Fund” to invest in Black and Latino-led startups. The fund was part of the firm’s effort to improve diversity following the killing of George Floyd in May of the same year.
“We have to put money behind it, set plans, and hold ourselves accountable,” SoftBank’s Chief Operating Officer Marcelo Claure, who will head the fund, said in a letter to employees back then.
Three years later, SoftBank announced Thursday it is rebranding the funding under a new name called “Open Opportunity Fund.” In conjunction with the rebrand, the Japanese giant also said it will raise and invest $150 million in Black and Latino-led startups.
The second fund intends to surpass the initial scope of the first effort, which allocated $100 million towards investing in 75 companies led by Black and Latino individuals. Some notable companies supported by the first fund include Greenwood, Career Karma, and Praxis Labs. With the new fund, SoftBank plans to deploy $150 million in investments within a span of three years. SoftBank will participate as a limited partner in the Open Opportunity Fund (OOF), indicating its support and involvement in the initiative.
In addition to the funding, SoftBank also announced the appointment of Paul Judge as the chairman of their fund. Prior to the rebranding, Judge served on the investment committee of the fund. Under the new structure, he will become a co-owner of the Open Opportunity Fund (OOF) along with SoftBank and certain affiliates. The move signifies SoftBank’s commitment to expanding and strengthening its investment capabilities with the involvement of experienced professionals like Judge.
“The key point in changing the name is that we’re opening access for others to invest in the fund and to grow more scale,” Judge told TechCrunch. “The lack of funding for Black and Latino founders is still tens of billions away from parity; this is another step in making sure we bring more opportunity to those talented founders.”
Unlike other funds, SoftBank said at the time of launch that it will not take a traditional management fee and half of its gains will be reinvested into subsequent Growth Opportunity Fund. In addition to the new $100 million Opportunity Fund, SoftBank also said that it will match all personal donations, up to $1,000, to support nonprofit organizations that fight racism and discrimination.
Opportunity Growth Fund was launched by Marcelo Claure, former SoftBank COO, alongside Paul Judge, Shu Nyatta, the managing partner, and Stacy Brown-Philpot, CEO of TaskRabbit. Since its inception three years ago, the fund has witnessed seven successful exits and has made investments in five unicorn companies. Notable among these investments are Cityblock Health and Brex, highlighting the fund’s ability to identify promising opportunities and support their growth.
Founded in 1981 by Masayoshi Son in September 1981, the Tokyo, Japan-based SoftBank is a multinational telecommunications and internet corporation focused on broadband, fixed-line telecommunications, e-commerce, internet, technology services, finance, media and marketing, and other businesses. Softbank is the sixth-largest telephone operating company with total revenue of $74.7 billion. The company has invested in a lot of startups including Uber.
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- Source: https://techstartups.com/2023/05/18/softbank-to-invest-150-million-in-black-and-latino-led-startups-rebrands-its-second-fund-to-open-opportunity-fund/
