Make no mistake: PayPal’s dollars may be aimed at closing the racial wealth gap—but it’s also about what the payments company will look like years later.
This morning, PayPal is announcing that it has invested another $50 million in Black and Latinx-led venture capital funds, doubling a commitment that it initiated last year.
While PayPal did not say exactly how much each fund had received, it chose 11 funds that each have at least one managing partner from the Black and Latinx community and a track record of investing in founders with minority backgrounds: Aperture Venture Capital, Collab Capital, Interlace Ventures, Kapor Capital, MaC Venture Capital, Noemis Ventures, Seae Ventures, SV LATAM Capital, and three additional funds that PayPal did not identify.
Named to Coins2Day’s World’s Greatest Leaders list this year in part for his efforts in this arena, PayPal CEO Dan Schulman has long spoken out on closing the racial wealth gap. Almost exactly a year ago, the death of George Floyd, a Black man, at the hands of a Minneapolis police officer jumpstarted questions around race in corporate America. PayPal subsequently pledged $535 million to support Black and minority-owned businesses and communities, later carving out $50 million specifically for eight Black- and Latinx-led funds. In total, PayPal has now invested $100 million in Black- and Latinx-led venture capital firms.
“If you think about generational wealth creation, that comes through entrepreneurship and venture capital,” Schulman told Term Sheet. “One of the glaring gaps is the amount of venture funding that goes to Black, Latinx and underrepresented communities. But hopefully, when they make it, they think about getting back into their communities—a little like when the PayPal founders reinvested [in the tech industry].”
It is fitting that roughly a fifth of PayPal’s total commitment to minority-led businesses is now going to work within venture capital. PayPal has been a veritable factory for successful entrepreneurs and venture capitalists in years past—with former founders and employees such as Max Levchin, Peter Thiel, and Elon Musk founding companies such as Affirm, Palantir, and Tesla after leaving the company.
But the payments company has also taken a very strategic approach to deploying the capital. PayPal skinnied its investments down to 11 funds from a pool of nearly 200 Black- and Latinx-led firms. And while it didn’t limit itself to fintech, funds in the list such as Noemis Ventures are known for their financial technology focus, creating partnership opportunities for PayPal as companies in those portfolios grow.
“We’re clearly opening our own aperture,” says Schulman, when asked whether PayPal was seeking to reach new audiences with the investments. “And I think that can only be beneficial for PayPal and those entrepreneurs we’re investing in, because it makes it more likely that PayPal’s venture arm can invest in a later round of these entrepreneurs.”
PayPal’s venture arm largely invests beyond Series A rounds. By investing in funds that largely invest in seed businesses, PayPal is creating a pipeline of companies that it could potentially invest in or perhaps even acquire.
“This is not a charity for them,” says Barry Givens, General Capital at Collab Capital, which raised $52 million from investors including PayPal Tuesday. “PayPal was looking for returns. They are looking for funds that can give them the same level of venture returns as any other fund they would put capital into. This is a kind of pipeline for them to get to talent, to get opportunities to acquire companies and to invest in companies.”
GIFTING-AS-A-SERVICE: It may seem esoteric, but investors in venture capital are betting that corporate gifting is enough of a headache for companies that they will pay other companies to deal with the logistics. The most recent company to get funding? Snappy, which raised $70 million from investors led by GGV Capital. Read more.
Lucinda Shen
Twitter: @shenlucinda
Email: [email protected]
P.S. The no-code and low-code movement is a potentially enormous market. But it also has its skeptics, if UiPath’s bumpy post-IPO ride is any indication. Join C3 AI President and Chief Technology Officer Edward Abbo, ServiceNow CIO Chris Bedi, and Lightspeed Partner Anoushka Vaswani for a Coins2Day Brainstorm Tech discussion on June 3 at 1 p.m. ET. Sign up here.
VENTURE DEALS
- Perch, a Boston-based acquirer of Amazon third-party brands, raised $775 million in Series A funding. Softbank Vision Fund 2 led the round and was joined by investors including Spark Capital and Victory Park Capital.
- Contentsquare, a Paris-based digital experience analytics company, raised $500 million in Series E funding. SoftBank Vision Fund 2 led the round and was joined by investors including Eurazeo, Bpifrance, KKR, Canaan, Highland Europe, and BlackRock.
- Forter, a New York City-based e-commerce fraud prevention company, raised $300 million in Series F funding. Tiger Global Management led the round and was joined by investors including Third Point Ventures, Adage Capital Management, Bessemer Venture Partners, Sequoia Capital, March Capital, NewView Capital, Salesforce Ventures and Scale Venture Partners.
- Bowery Farming, a New York City-based vertical farming company, raised $300 million in Series C funding. Fidelity Management & Research Company led the round valuing the company at $2.3 billion.
- Snapdocs, a San Francisco-based digital closing platform for the mortgage industry, raised $150 million in Series D funding. Tiger Global led the round and was joined by investors including Sequoia, Y Combinator, F-Prime, Maverick, Alkeon, and Wellington Management. The deal values the company at over $1.5 billion.
- Paysend, a London-based international payments platform, raised $125 million in Series B funding. One led the round and was joined by investors including Infravia Growth Capital, Hermes GPE Innovation Fund, and Plug and Play.
- Wiz, a Tel Aviv-based cybersecurity startup, raised $120 million. Salesforce and Blackstone led the round.
- Akili Interactive, a Boston-based prescription video game treatment company, raised $110 million in Series D funding. Neuberger Berman Funds led the round and was joined by investors including Polaris Partners, Mirae Assets, Shionogi & Co, and New Leaf Venture Partners.
- Xanadu, a Toronto-based quantum computing company, raised $100 million in Series B funding. Bessemer Venture Partners led the round and was joined by investors including Capricorn, Tiger Global, BDC Capital, In-Q-Tel, Georgian, OMERS, and Tim Draper.
- Clear Labs, a San Carlos, Calif.-based maker of a sequencing diagnostics platform, raised $60 million in Series C funding. Counterpoint Global (Morgan Stanley) and T. Rowe Price Associates led the round and were joined by investors including Redmile Group, Menlo Ventures, Wing Ventures, GV, HBM Genomics, Khosla Ventures, Felicis Ventures, and Dafgard.
- Salt Security, a Palo Alto, Calif.-based API security company, raised $70 million in Series C funding. Advent International led the round and was joined by investors including Alkeon Capital, DFJ Growth, Sequoia Capital, Tenaya Capital, S Capital VC, and Y Combinator.
- Qualified, a San Francisco-based sales and marketing platform for companies that use Salesforce, raised $51 million. Salesforce Ventures led the round and was joined by investors including Norwest Venture Partners and Redpoint Ventures.
- Whatnot, a Los Angeles-based live-shopping platform, raised $50 million in Series B funding. Anu Hariharan from Y Combinator Continuity led the round and was joined by investors including Andreessen Horowitz, Animal Capital, musicians Ryan Tedder and DJ Skee with Mint 10, NFL players DeAndre Hopkins and Bobby Wagner, and Jeremy Padawer.
- Uptycs, a Waltham, Mass.-based security analytics platform, raised $50 million in Series C funding. Norwest Venture Partners led the round and was joined by investors including Sapphire Ventures and ServiceNow Ventures.
- CMX, a San Diego-based enterprise quality management software maker, raised $50 million in Series A funding. Morgan Stanley Expansion Capital invested.
- Yalo, a San Francisco-based customer engagement software maker for commerce companies, raised $50 million in Series C funding. B Capital Group led the round.
- AnyClip, a New York City and Tel Aviv-based video analytics company, raised $47 million. JVP led the round.
- Material Security, a San Francisco Bay Area-based company with cybersecurity for email accounts even after they have been compromised, raised $40 million in Series B funding. Elad Gil led the round and was joined by investors including a16z’s Martin Casado.
- Infinitum Electric, an Austin-based air-core motor maker, raised $40 million in Series C funding. Energy Innovation Capital led the round and was joined by investors including Cottonwood Technology Fund, Chevron Technology Ventures, and Ajax Strategies.
- Tractive, a maker of a GPS device for tracking dogs and cats, raised $35 million. Guidepost Growth Equity led the round.
- Airbyte, a San Francisco-based maker of an open-source data integration platform, raised $26 million in Series A funding. Benchmark led the round and was joined by investors including 8VC, Accel, SV Angel, and Y Combinator.
- Lightrun, a Tel Aviv-based debugging and observability company, raised $23 million in Series A funding. Insight Partners led the round and was joined by investors including Glilot Capital Partners.
- Epsor, a Paris-based company specialized in employee and retirement savings plans, raised €20 million ($25 million) in Series B led by Gaia Capital Partners.
- Rewatch, a San Francisco-based maker of a security-focused video platform for companies, raised $20 million in Series A funding. Andreessen Horowitz led the round and was joined by investors including Semil Shah at Haystack and Kent Goldman at Upside Partnership.
- Prismic, a Paris-based website editing platform, raised $20 million. Aglaé Ventures and Eurazeo led the round.
- Solidus Labs, a New York City-based crypto risk monitoring company, raised $20 million as part of its Series A round. Evolution Equity Partners led the round and was joined by investors including Hanaco Ventures, 645 ventures, FTX and Avon Ventures.
- Jumpstart, a San Francisco-based diversity-focused recruiting platform, raised $20 million. Lachy Groom and Sequoia Capital led the round and were joined by investors including Four Rivers Capital.
- 7shifts, a Canada-based labor management platform for restaurants, raised $21.5 million in Series B funding. Enlightened Hospitality Investments led the round and was joined by investors including Ten Coves Capital, Relay Ventures, and Conexus Venture Capital.
- Sentieo, a San Francisco-based financial and corporate research platform provider, raised $20 million in Series B funding. Ten Coves Capital led the round and was joined by investors including Centana Growth Partners and Studio Management.
- Commerce Layer, a Wilmington, Del.-based commerce API company, raised $16 million in Series B funding. Coatue Management led the round and was joined by investors including Benchmark and Mango Capital.
- Sharebite, a New York-based food ordering platform built for workplaces, raised $15 million in Series A funding. Lafayette Square led the round.
- Oliver Space, a San Francisco-based home furnishing startup, raised $13 million in Series A funding. U.S. Venture Partners led the round and was joined by investors including Mayfield Fund, Abstract VC, Expa Capital, and Burst Capital.
- BrightHire, a New York City-based interview intelligence platform, raised $12.5 million in Series A funding. Index Ventures led the round and was joined by investors including Next Play Ventures, Flybridge Capital, and Ground Up Ventures.
- Flume Health, a New York City-based health plan administration platform, raised $6 million. Crosslink Capital led the round and was joined by investors including Route 66 Ventures and Convene CEO Ryan Simonetti, Accomplice, Founder Collective and Primary Venture Partners.
- Evertas, a Chicago-based crypto insurance company, raised roughly $5.8 million in seed funding. Morgan Creek Digital, CMT, and HashKey are among the investors.
- Emile, a Los Angeles-based maker of on-demand courses for students, raised $5.3 million in seed funding. Kleiner Perkins led the round and was joined by investors including Owl Ventures, Hannah Grey VC, Supernode Ventures, SoftBank’s Opportunity Fund, and Uber Alumni Syndicate.
- Reclaim.ai, a Portland-based calendar assistant and time management platform, raised $4.8 million in seed funding. Index Ventures led the round and was joined by investors including Gradient Ventures, Flying Fish, Operator Partners, and Calendly.
- ARTA, a New York City-based logistics software and fulfillment services company for high-value goods and collectibles, raised $4.5 million in seed funding. Investors include Corazon Capital, Gaingels Ventures and Flight.VC.
- Treet, a San Francisco-based resale platform, raised $2.8 million. Investors include Bling Capital, BAM Ventures, BBG Ventures, Interlace Ventures, and V1.VC.
- Datacy, a San Jose, Calif.-based consumer data transparency startup, raised $2.4 million in seed funding. Investors included Redhawk VC, Trend Forward Capital, Truesight Ventures, Madrona Pioneer Fund, GFR Artists, Golden Seeds, APX, and the Female Founders Alliance.
- Kinema, a New York City-based social cinema platform, raised $2 million in seed funding. Investors included Kindred Ventures, Lupa System, Galaxy Interactive and I2BF Global Ventures.
- Park Place Payments, a Los Angeles-based payment processing fintech, raised $1.5 million in seed funding. Curate Capital led the round.
PRIVATE EQUITY
- Helios Fairfax Partners invested in the NBA’s African entity in a deal valuing it at $1 billion.
- KKR invested $55 million in eSSENTIAL Accessibility, a Canada-based provider of accessibility services.
- CentroMotion, a portfolio company of One Rock Capital Partners, agreed to acquire Carlisle Brake & Friction, a Medina, Oh.-based manufacturer of friction materials and mechatronic solutions, from Carlisle Companies Incorporated (NYSE: CSL). Financial terms weren't disclosed.
- H.I.G. Growth Partners invested in Accounting Seed, a Columbia, Tenn.-based provider of accounting and financial management software. Financial terms weren't disclosed.
- Longshore Capital Partners acquired Stuzo, a Philadelphia-based loyalty and payments company. Financial terms weren't disclosed.
- PAI Partners is in exclusive discussions to invest in Apave Group, a French technical, environmental, human and digital risk management company. Financial terms weren't disclosed
- Sunstone Partners merged Cloudbakers and Qwinix Technologies, two Google Cloud-focused consultancies. Financial terms weren't disclosed.
- Swander Pace Capital acquired Mighty Spark Food Company, a Minneapolis-based protein brand. Financial terms weren't disclosed.=
- SyBridge Technologies, backed by Crestivew Partners, acquired Toolstats, a Royal Oak, Mich.-based tool tracking software maker. Financial terms weren't disclosed.
EXITS
- Smart Eye acquired Affectiva, a Boston-based emotion-tracking startup, for $73.5 million in a cash-and-stock deal. Investors in Affectiva have included Kleiner Perkins, Myrian Capital, and Pegasus Tech Ventures.
- BDT Capital Partners agreed to acquire Culligan International, a Rosemond, Ill.-based water treatment company, from Advent International and Centerbridge Partners. Financial terms weren't disclosed.
- L Catterton acquired Kodiak Cakes, a Park City, Ut.-based food business. Existing investors Sunrise Strategic Partners and Trilantic North America will continue owning a minority stake. Financial terms weren't disclosed.
- Thoma Bravo agreed to acquire Greenphire, a King of Prussia, Pa.-based maker of financial management software for clinical trials, from The Riverside Company. Financial terms weren't disclosed.
- Warburg Pincus will acquire a stake in NetDocuments Software, an Orem, Ut.-based legal tech company, from Clearlake Capital. Cove Hill Partners will retain its stake. Financial terms weren't disclosed.
OTHER
- Amazon will acquire Metro-Goldwyn-Mayer, the movie studio, for $8.5 billion.
- Sinch (STO: SINCH), a Swedish customer engagement company, raised $1.1 billion via direct share. Investors included Temasek and SoftBank.
IPOS
- Vimeo, a New York City-based video company spinning out of IAC, closed with a $7.2 billion valuation.
- Lyell Immunopharma, a South San Francisco-based biotech developing therapies for solid tumors, filed to raise up to $150 million. Arch Venture Partners and Foresite Capital back the firm.
SPACS
- P3 Health Partners, a New York-based health management company, will go public via merger with Foresight Acquisition, a SPAC. A deal values the entity at $2.3 billion.
- Valens, an Israel-based semiconductor company, plans to go public via merger with PTK Acquisition, a SPAC. A deal values the company at $1.2 billion.
- BigBear.ai, an artificial-intelligence company, is in talks to go public via merger with GigCapital4, a SPAC, per Bloomberg.
F+FS
- Entrepreneurial Equity Partners, a Chicago-based private equity firm focused on the food and consumer packaged goods industries, closed its first fund with $423 million.
- Mindset Ventures, a Brazil-based venture firm, raised $52 million for its third fund.
PEOPLE
- DaGrosa Capital Partners, a Florida-based private equity firm, hired Miami Mayor Francis Suarez as a senior operating partner.
