PayPal Holdings, Inc. is betting on Black and Latino/a small businesses. The worldwide online payments systems company recently announced it will invest $50 million in eight early-stage, Black and Latinx-led venture capital funds. These capital funds include: Chingona Ventures; Fearless Fund; Harlem Capital; Precursor Ventures; Slauson & Co.; VamosVentures; Zeal Capital Partners; and one additional fund not as yet announced.
“Black and Latinx founders have been underrepresented in venture capital funding for far too long,” said Dan Schulman, president and CEO, PayPal. “By directing our dollars to investors from underrepresented communities, we’re supporting their investment in Black and Latinx entrepreneurs at the earliest stages. We’re honored to support this outstanding group of venture capitalists as we seek to bring more equity to the fundraising process.”
This investment is part of Pay Pal’s overall commitment to invest $530 million to support Black-owned businesses, strengthen underrepresented minority communities and fight for racial equity and economic equality. This past September they also announced $5 million in grants to support Black-owned businesses in the U.S. recovering from the economic impact of COVID-19 pandemic, working with non-profit organizations to execute.
“PayPal’s investment, alongside those from our other limited partners, will help us support this group and improve the landscape for everyone,” said Marcos C. Gonzalez, founding partner of L.A. based VamosVentures who will receive $10 million in total funding, according to a PayPal spokesperson. VamosVenture’s mission is to empower diverse communities through wealth creation, talent pipeline building, social mobility and unique tech-driven solutions to challenges persistent in communities of color. To date the fund has made six investments, mostly in technology platforms led by Latino founders.
“Not only is it undeniable that there is a pipeline of extraordinary diverse tech visionaries who are being overlooked, it is also imperative to the country to fully utilize and incorporate their ideas, talent and gumption,” Gonzalez added.
PayPal will work collaboratively with these early-stage funds and, in some cases, invest directly in businesses through PayPal Ventures, its venture capital arm. PayPal Ventures invests in series A through later funding rounds of startups in areas of strategic relevance to PayPal, including financial services, commerce enablement and payments infrastructure. PayPal will also begin offering a three-month fellowship to a Black or Latinx graduate student each semester, through which the PayPal Ventures team will provide coaching, training and mentoring.
Another venture capital fund that will be part of this deal is Chingona Ventures which seeks to drive returns by investing in founders with a unique perspective on a customer base that many venture investors do not understand. Founded by Samara Mejia Hernandez, Chingona Ventures is based in Chicago.
— MINA CASTILLO
