PayPal Holdings has announced an investment of $50 million in eight African American- and Latinx-led venture capital firms as part of a $530 million commitment in support of efforts to advance racial equity in the United States.
Announced in June, the commitment includes a $500 million economic opportunity fund aimed at strengthening African American-owned businesses and underrepresented minority communities, in part by investing directly in minority-led startups and investment firms. To that end, the fund will invest $50 million in Chingona Ventures, the Fearless Fund, Harlem Capital, Precursor Ventures, Slauson & Co., Vamos Ventures, Zeal Capital Partners, and a fund yet to be named, all of which provide early-stage capital to the kinds of minority entrepreneurs who are often ignored by larger VC firms. PayPal also will begin offering a three-month fellowship to a Black or Latinx graduate student every semester that includes coaching, training, and mentoring from the PayPal Ventures team.
The announcement of the investment follows a round of COVID recovery grants totaling $5 million in September in support of Black-owned businesses, $10 million in empowerment grants in August to help Black-owned small businesses stabilize and reopen, and the placement of $50 million on deposit with South Carolina-based Optus Bank, a Black-owned firm focused on providing equitable access to capital and financial services for minority communities.
"PayPal recognizes that our lived experience allows us to deeply empathize with the journey of other women of color entrepreneurs," said Fearless Fund founding partner Arian Simone. "Women of color should be able to pitch to people who look like them on the other side of the table."
"So little venture money goes into minority communities. This is a way to think about how we start to create wealth creation," PayPal CEO Dan Schulman told the New York Times. "Values that are just on a wall are just propaganda and are worse than having no values at all. I don't think we can stand aside and hope that the problems of our society are just addressed by governments and nonprofits."
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