With a new name but same core mission, Open Opportunity Fund will be chaired by Paul Judge
By Nancy Dahlberg
Nearly three years after SoftBank launched its $100 million SB Opportunity Fund to back diverse founders, SoftBank and the fund are announcing a big evolution: A new name, new leadership and a $150 million fund 2 on the way.
The SB Opportunity Fund, founded in June 2020 to fund Black and Latino-led startups, has changed its name to the Open Opportunity Fund, marking an evolution of opening access to other LPs and organizations to invest in the fund. SoftBank and the fund also announced this week that they are raising a second fund, with a goal of raising $150 million for their mission.
Entrepreneur and investor Paul Judge will lead the fund as chairman after serving as a founding member of the fund’s Investment Committee. Judge and affiliated entities also have entered into an agreement to acquire an ownership stake and become co-owners of the Open Opportunity Fund.
“It’s the same thesis: investing in outstanding Black and Latino founders across the country,” said Judge, a serial entrepreneur who is also managing partner of Panoramic Ventures. “But one of the main differences is opening up access to others.”
Since 2020, SoftBank deployed $100 million into 75 Black- and Latinx-led companies, 10 of them here in in Miami. In addition, two of SoftBank Group’s core growth funds — Vision Fund 2 and the Latin America Fund — separately invested nearly $600 million in Opportunity Fund portfolio companies, for a total of nearly $700 million invested across SoftBank’s funds. Portfolio companies include Atomic, Brex, Cityblock Health, Greenwood, Career Karma, and Miami-based startups QuickNode, Lumu, AllHere, Eight Sleep, Lula and others. The fund has has had seven exits.
“SoftBank proved that the Opportunity Fund model works for increasing access to capital for founders who have been traditionally overlooked, and we remain committed to the fund and its mission. Paul Judge is a seasoned leader strongly positioned to take the fund into its next chapter as we invite new partners to join SoftBank in our commitment,” said Brett Rochkind, Managing Partner of SoftBank Investment Advisors, in a statement.
The fund is run by Judge, Dami Osunsanya, Chad Harris and Jeff Asiedu (pictured above), and SoftBank will continue its support as the founding LP and an investor in Fund 2. In an interview with Refresh Miami on Friday, Judge and Osunsanya shared more about plans for the new fund, which they hope to start making investments out of later this year.
Fund 2 will continue to invest at all stages, Paul said. “That’s important for supporting minority founders because there’s bias that exists in every stage of the VC process whether you’re pre-seed stage – two people with an idea – or you’re Series A or even when you get into growth stage.” The first fund was invested almost equally between early stage and growth stage companies in terms of net dollars invested.
The fund also invests across multiple sectors from fintech and cybersecurity to enterprise SaaS, HR tech, healthtech and more. In fund 1, 61% are Black-owned companies, 43% are Latino-founded, and women-founded companies comprise 12% of the portfolio. Osunsanya said check sizes range from $100,000 all the way to $10 million, probably averaging around $1 million to $2 million.
Historically, minority-led companies receive a share of funding in the very low single digits. According to Crunchbase, funding for Black founders last year amounted to just 1% of the $216 billion invested in U.S. startups.
Yet, Osunsanya said the SoftBank investing group was “blown away” by the quality of the of the companies they were funding that are now “building incredible, sustainable companies.” And even in this environment, she noted that six or seven of their portfolio companies raised follow-on investments in Q1. “We’re seeing progress, but there’s still a lot more work to be done. That’s why we’re really excited, under Paul’s leadership, to take this to the next level.”
The Open Opportunity Fund hopes to move the needle on the dismal statistics by leading by example, Judge said. “If we can show the world shining examples of how they build big and valuable companies solving really important problems, and then they deliver outsized returns to investors, we prove the thesis that it’s not only the right thing to do, but it’s the profitable thing to do.”
About his new ownership role, Judge adds, “In sports you often hear that there’s minorities on the field, but there’s not enough in the coaching positions and ownership and the same thing happens in the tech industry. We’re making some progress around minority founders, but not enough progress yet around minority partners or funds. We’re proud that at Open Opportunity Fund, diversity exists in every layer.”
Today’s challenging economy plays toward the strengths of minority founders, Judge said. “Minorities are naturally scrappy, creative, innovative. In this funding environment, while challenging for all startups, minority entrepreneurs really understand what it means to adapt and survive. We’re seeing that throughout the portfolio.” And along the way, he said, the Open Opportunity Fund is building a unique community of exceptional founders and providing them the support and connectivity to help them navigate these unique times.
Adds Osunsanya: “As a boomerang Miamian, I just couldn’t be prouder establishing fund one in Miami with Marcelo (Claure) and Paul and Shu (Nyatta) over two years ago, and then coming back under Paul’s leadership and being able to double down, making sure that Miami does provide the jobs and the ecosystem for the minorities here to be able to grow and scale their careers.”
READ MORE ON REFRESH MIAMI
- Venture capital took a nosedive in Q1. Here’s how the Miami metro area fared and the top deals
- Q&A with Dami Osunsanya, a new director in SB Opportunity Fund
- SB Opportunity Fund deployed $100M into 70 startups & will keep investing in underrepresented founders
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