The exact amount was not disclosed.
The credit card giant also unveiled a partnership with Greenwood, a fintech firm aimed at Black and Latino consumers and business owners, to issue the platform’s first debit cards.
“This is part of our broader work on financial inclusion,” Mastercard president of strategic growth Michael Froman told CNBC. “We want to bring all the assets of the company to the table, to engage with them, help them succeed, help them get to scale.”
Fearless Fund looks to provide early financing to companies started by women of color in the technology, consumer packaged goods, food, fashion and beauty industries.
Other investors in Fearless Fund include PayPal, Bank of America and Costco.
The three co-founders of Fearless Fund are chief development officer Keshia Knight-Pulliam, who played Rudy Huxtable on the “Cosby Show;” CEO Arian Simone, an entrepreneur and best-selling author; and COO Ayana Parsons, a veteran consultant.
Simone told CNBC the Mastercard investment has the potential to be a game changer for the companies in the fund’s portfolio.
“This deal also marks a major milestone for our brand,” she said. “When women of color are provided with the necessary resources and funding to launch their businesses, the sky’s the limit.”
Women of color are “notoriously underfunded,” Simone said, adding that they don’t typically rely on big institutional investments when creating their business plans. “They are prepared to bootstrap and [are] in the mindset that they will need to be the primary driving force behind their ideas,” she added.
Black and Latino female founders have received less than 1% of venture capital funding, according to a 2020 report from Digital Undivided.
“When a company such as Mastercard provides this level of funding to propel women of color founders, it takes everything that these women are already doing and maximizes it to a degree that will allow them to shake any industry they enter,” Simone said.
Last September, the credit card giant made a $500 million commitment to support Black communities and help close the racial wealth and opportunity gap over the next five years.
“There are a lot of changes happening in the VC world, with all the announcements and commitments being made by big corporations to invest in diverse fund managers, but we will have to see if all are truly executing and operationalizing based on their statements,” Simone said.
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