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Mastercard on Tuesday announced a multi-million dollar investment in Fearless Fund, a venture capital firm founded by black women with the goal of investing in minority entrepreneurs.
The exact amount has not been disclosed.
The credit card giant also announced a partnership with Greenwood, a fintech company targeting Black and Latino consumers and business owners, to issue the platform’s first debit cards.
“This is part of our broader financial inclusion work,” Michael Froman, President, Strategic Growth for Mastercard, told CNBC. “We want to bring all of the company’s assets to the table, connect with them, make them succeed and help them become scalable.”
The Fearless Fund aims to provide early funding for companies founded by women of color in the tech, consumer goods, grocery, fashion and beauty sectors.
Other investors in the Fearless Fund include PayPal, Bank of America, and Costco.
The three co-founders of Fearless Fund are Keshia Knight-Pulliam, Chief Development Officer who played Rudy Huxtable on the “Cosby Show”. CEO Arian Simone, entrepreneur and best-selling author; and COO Ayana Parsons, an experienced consultant.
Arian Simone speaks at the Girlboss Rally NYC 2018 at the Knockdown Center on November 17, 2018 in Maspeth, New York.
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Simone told CNBC that the Mastercard investment has the potential to change the companies in the fund’s portfolio.
“This deal is also an important milestone for our brand,” she said. “When women of color have the resources and funds to start their businesses, the sky’s the limit.”
Women of color are “notoriously underfunded,” Simone said, adding that they usually don’t rely on large institutional investments to help them draw up their business plans. “You’re ready to boot as well [are] with the attitude that they must be the main driving force behind their ideas, “she added.
Black and Latin American female founders received less than 1% of venture capital funding, according to a 2020 report by Digital Undivided.
“When a company like Mastercard puts these funds in place to advance women from color founders, it is taking everything those women are already doing and maximizing it to an extent that allows them to shake any industry they step into,” said Simone.
Last September, the credit card giant made a $ 500 million pledge to help the black communities and fill the gap between racial wealth and opportunity over the next five years.
“There is a lot of change going on in the VC world, with all the announcements and pledges from big companies to invest in different fund managers, but we will have to see, based on what they say, that they are all really executed and operationalized.” Said Simone.
“Mastercard continues its commitment, but we need to make sure everyone is making systemic change rather than following a trend. What I really hope from investors is a greater focus on inclusion.”
Mastercard to help Greenwood issue debt cards
Andrew Young, former Congressman and Ambassador to the United Nations, in Austin, Texas, April 9, 2014
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Greenwood will issue two Mastercard-supported debit cards that offer features such as identity theft protection, credit monitoring and airport concierge services.
The service was co-founded by civil rights leader Andrew Young, rapper activist Michael “Killer Mike” Render, and Ryan Glover, founder of the Bounce TV Network.
“It is encouraging to know that Mastercard is aligned with our mission of economically empowering people with color,” said Glover, chairman of Greenwood. The alliance also provides “Greenwood customers have a world-class product and the tools to create wealth,” he added.
Mastercard and Greenwood are also collaborating on a finance podcast and other educational content on banking, financial planning, home ownership, and wealth creation to engage the Black and Latino communities.
Greenwood, which launched last October, already has a waiting list of more than 500,000 people. The Greenwood Debit Mastercard is expected to be available later this year.