SoftBank created the Opportunity Fund barely a week after the murder of George Floyd. The firm committed to invest $100 million in companies led by underrepresented racial minorities, establishing the largest fund of its kind. A year later, SoftBank has already allocated half the cash and anticipates creating a second fund by year-end.
It’s far too early to tell whether the investments will be successful. The money is reaching about 50 young technology companies around the U.S. and giving them a chance to prove the merits of their businesses before going on to seek more capital from SoftBank or elsewhere.
All of the investments are in startups founded by Black or Hispanic entrepreneurs. The average check is for $1 million, and a half-dozen or so are already gearing up to raise their next round of funding. "Seed and A, that’s where you can make the most difference,” said Shu Nyatta, a managing partner at SoftBank Group International who leads the fund. "The wrong way to do it is to have a pile of money.”