SoftBank, a Japanese corporation, has announced the creation of an expanded evergreen fund dedicated solely to supporting Black, Latinx and Native American entrepreneurs in the United States. SoftBank’s $100 million Opportunity Growth Fund for underrepresented founders was announced in June 2020, and this pledge is a continuation of that fund.
Up till now, the initiative has already benefited 70 businesses. About 55% of the first portfolio firms were formed by Black people, 40% by Latino people, and 5% by Black and Latino people. Despite this, the SoftBank Opportunity portfolio favors men, with only 13% of companies in the portfolio having been started by women of color.
SoftBank Group announced a pledge to invest in underrepresented creators in the face of rising racial inequality, and the SB Opportunity Fund was formed in less than 24 hours. SoftBank is now doubling down on its first investment by making this initiative a long-term commitment.
Evergreen funds are open-ended and do not have set end dates. Companies may be able to recycle money from realized profits without restrictions, as well as invest across stages and perhaps even various ownership percentages, using this type of fund. SoftBank has not committed a specific amount of funds to the venture, making it difficult to gauge how significant the contribution will be. SoftBank is expected to make 20 to 30 investments every year, with initial check amounts ranging from $300,000 to $700,000, and follow-on finance ranging from $1 million to $5 million, according to sources.
SoftBank Investment Adviser (“SBIA”) Managing Partner Catherine Lenson commented: “The SB Opportunity Fund and Emerge are two core pillars of SoftBank Group’s ongoing effort to support a more equitable ecosystem within venture capital and technology, that should reflect the world in which we live. Through the Opportunity Fund and Emerge, SoftBank has invested in an incredible pool of companies and will continue to identify new ones, while focusing on creating value for the portfolio by leveraging the vast resources that SoftBank’s network has to offer.”