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SoftBank to launch $100m diversity fund to back founders of colour

SoftBank - Issei Kato  /REUTERS  
SoftBank - Issei Kato /REUTERS

SoftBank is set to launch a $100m fund to back more founders of colour and address the lack of diversity in the start-up industry.

In a letter to employees on Wednesday, Marcelo Claure, SoftBank’s chief operating officer, said the launch of a new investment vehicle called the Opportunity Growth Fund, would "only invest in companies led by founders and entrepreneurs of colour”.

“The Opportunity Growth Fund will be the biggest fund providing capital to black Americans and people of color," he said in the letter. "We believe in this investment strategy, and we believe in these founders."

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The Japanese technology conglomerate has invested in a string of different businesses in recent years through its $100bn Vision Fund, but will look to tap into new businesses led by black and ethnic minorities through the new initiative.

However, the announcement comes just weeks after Banjo, a SoftBank-backed company,  saw the departure of its chief executive after it emerged that he had previous ties to the Ku Klux Klan.

In a blogpost, Banjo's boss Damien Patton addressed the issue, saying that "under the current circumstances" it was best for the company to go forward "under different leadership".

Technology intelligence - newsletter promo - EOA
Technology intelligence - newsletter promo - EOA

It comes as a number of companies have spoken out against racial inequality following the death of George Floyd in police custody in Minneapolis last week.

On Tuesday, Bank of America pledged $1bn to address economic and racial discrimination as part of a four-year commitment to support small businesses owned by ethnic minorities and fund health services close to BAME communities.

Meanwhile, a number of other companies including JP Morgan, Netflix and Amazon have put posts online to demonstrate solidarity with black people, promising to do more to address racism.