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SoftBank has recently announced a $100 million+ fund for founders of colour, in response to the riots and the resultant civil unrest, happening all over the US and globally as well.

The company made the announcement after riots erupted in several parts of the world to protest against racial disparities and level the playing field. The company has decided to start the “Opportunity Growth Fund” with a $100 million corpus in the beginning, but can increase the amount of investment over time.

In a company wide memo sent by Chief Operating Officer Marcelo Claure, he said the fund “will only invest in companies led by founders and entrepreneurs of color.” Thus, the focus is very unequivocal and clear. The fund might also be an opportunity for SoftBank to get back on its feet, as the conglomerate has had some rough bouts in the last year.

The company’s Vision fund yielded disastrous results, as most of the investments either failed or are performing very poorly. Moreover, the WeWork fiasco, which became the thorn in the company’s side, turned the company’s most ambitious bet into a nightmare. Situation had worsened to the extent that the company started selling assets to keep its head above the water, posting historical losses in Q1 2020.

This is also a chance for the company to clear its name off the Banjo fiasco. The CEO and founder of one of its portfolio companies, Banjo, resigned, after it was found that he had ties with KKK. Such serious allegations against a company that was tied closely to SoftBank’s machinery, were enough to worsen its already bad condition. With the fund, the company will also seek to remedy that situation, and from the looks of it, be successful.

SoftBank has also decided to forego the traditional management fee, which is usually a fee charged by the entity for initiating transactions. Instead it “seek to put as much capital as possible into the hands of founders and entrepreneurs of color.” The company will also donate a portion of its gains to organizations that create opportunities for people of color.

The company plans to pour 50% of the profits from the fund into subsequent Growth Opportunity Funds.

Claure also mentioned a dedicated diversity and inclusion program to examine hiring biases. He will lead the fund with Paul Judge and Stacy Brown-Philpot.

“I promise to do what I can to be an effective ally to Black Americans who have been fighting this injustice for centuries. Only by acknowledging and acting on racism – even the most subtle forms of it – can we hope to eradicate it. Otherwise, it thrives in silence,” Claure writes.

Claure also encouraged employees to donate, and said that it will match all personal donations, up to $1,000, to support nonprofit organizations that fight racism and discrimination.