Black-owned and minority-owned businesses are finally getting the funding they need.
According to reports from CNBC, Softbank created this fund — in under 24 hours — as a response to widespread protests across the country sparked by the murders of George Floyd, Breonna Taylor, Ahmaud Arbery, and others. CNBC also reported this is one of the largest funds created in light of the recent social unrest.
This initiative is also motivated by the minority-owned businesses that have been disproportionately affected by COVID-19.
“The Opportunity Growth Fund will be the biggest fund providing capital to black Americans and people of color,” said COO Marcelo Claure in a written letter to employees. “We have to put money behind it, set plans, and hold ourselves accountable.”
Funding for minority-owned businesses has historically shown inequity. According to Forbes, 1% of venture-backed founders are Black and Latinx founders make up 1.8% of funding recipients, while most venture-backed startups are led by Ivy League-educated white men.
The advantages white-owned businesses have over minorities is more than apparent, but companies like Softbank are working to rectify that.
“We spoke to Masa Son about the privilege that we see at SoftBank, being one of the largest tech investors in the world, and we needed to do something big about it,” Claure told CNBC. “The whole thing is to do something about it. I see a lot of people have good intentions, but I think each one of us needs to contribute to make change in America.”
According to Softbank, the company won’t be taking out traditional management fees on the Opportunity Growth Fund and plans to invest in companies that are using technology to “disrupt traditional business models.”
Users online have begun to call out companies on the diversity of their staff and demanded changes be made to hire more Black and brown employees.
Claure sent a letter to all Softbank employees this week stating the company is creating a dedicated diversity and inclusion program to examine hiring biases.
Additionally, Softbank will be donating a portion of its gains to organizations that create opportunities for people of color who combat racism, discrimination, and promote unity.