PayPal Holdings Inc (NASDAQ:PYPL) has announced a $50 million investment in eight Latino- and Black-led venture capital funds. Following the civil unrest in June against police brutality and systemic racism, the company had pledged $530 million towards supporting minority communities and black-owned enterprises.
Eight venture capital funds to benefit from PayPal investment
The company is following up on its promise with the investment in venture funds. The funds include Fearless Fund, Slauson &Co., Vamos Ventres, Chingona Ventures, Harlem Capital, Zeal Capital Partners, and Precursor, with another fund yet to be named. These firms were picked after interviewing over 60 firms that had applied through the PayPal website. PayPal has, however, not stated how much each fund will receive. The investment is part of the company’s commitment to support and strengthen minority communities and help address the racial wealth gap.
The company has been thinking of a way to reduce the racial wealth gap, something other companies have been addressing. The investors offer important capital to businesses at a stage that PayPal can’t, and they focus on enterprises that large venture firms have ignored.
PayPal seeks to bridge the wealth gap in underrepresented communities
Dan Schulman, the CEO of PayPal, said that Latinx and Black founders are underrepresented in venture capital funding. As a result, there is little venture money that goes into minority communities, and thus PayPal is seeking a way to bridge the gap. He added that the investment in underrepresented communities is a way to support Latinx and Black entrepreneurs at the early stages. Schulman said that they are honored to support the venture capital firms as the company seeks to deliver more equity in fundraising.
Through its venture capital arm PayPal Ventures, the company will collaborate with the early-stage funds, and in some instances, it will invest directly in businesses. PayPal Ventures is known to invest in Series A funding rounds at later stages for enterprises pursuing areas that are of relevance to PayPal, such as commerce enablement, financial services, and Payments structure.