Synchrony recently announced it will commit $15 million to venture capital funds led by Black, Latinx and female investing partners. The first funds selected to receive money include Chingona Ventures, Seae Ventures and Zeal Capital Partners. They chiefly support early stage startups across the fintech, healthcare and future of work sectors. There may be additional funds at a later date. The move builds on Synchrony’s commitment to support minority and women entrepreneurs and underrepresented communities. It also advances Synchrony Ventures’ direct investment strategy to accelerate growth and innovation for Synchrony, its partners and consumers.
“For too long, Black, Latinx and female founders have been underrepresented in venture capital funding,” said Trish Mosconi, EVP, Chief Strategy Officer and Corporate Development at Synchrony. “Together we must take collective action to help close the venture funding gap and provide equal access to capital for diverse entrepreneurs and underserved communities.”
Boosting overlooked venture capital funds
According to Crunchbase, female founders receive only three percent of investment funding. Significantly, this statistic has not changed in a decade. Since 2015, Black and Latinx founders in the U.S. have raised over $15 billion. This represents 2.4 percent of total U.S. venture capital raised during this time, per another Crunchbase study. Meanwhile, a Deloitte study shows that 65 percent of investment firms reported having no female partners in 2020. Furthermore, 93 percent of firms reported having no Black partners in 2020.
Synchrony’s ventures team is now led by Jeff Lamour. The team focuses on early-stage founders driving innovation in markets and sectors aligned with the company’s growth strategy, mission and values. Lamour will continue to develop this strategy and promote equity in the investment community. Synchrony will collaborate with the funds to further support the growth and success of their portfolio. This support includes investing additional growth capital to minority entrepreneurs focused on disrupting fintech, commerce and healthcare.
The initial three funds have investing strategies that align with Synchrony’s business priorities and commitment to advancing diversity and inclusion. Synchrony’s $15 million commitment will also include additional VC funds. The company will select those funds later this year.
Selected venture capital funds
Chingona Ventures focuses on technology around financial services, women and food. It also focuses on health and wellness, the future of learning and the future of work. Chingona Ventures is based in Chicago.
“With Chingona Ventures, I’ve made the commitment to find those entrepreneurs who may not fit the ‘pattern recognition’ inherent in the venture industry. Synchrony’s support is vital to help overlooked tech founders realize their unique vision,” said founder Samara Mejia Hernandez.
Seae Ventures is a healthcare-focused fund. Three partners–Tuoyo Louis, Jason Robart and Peter Sally–founded the company in 2019. Its goal is to better balance the needs of patients, providers and payers. It aims to do this by investing in diverse entrepreneurs with high growth potential. The founders saw a need for new thinking in healthcare to address the diversity of the population.
“While there have been significant advancements in healthcare over the last several decades, unfortunately there also has been a widening gap in health disparities among traditionally underserved and underrepresented populations,” said Seae Co-founder and Managing Partner Jason Robart. “We are determined to do something about that and are excited to partner with Synchrony to fund women and BIPOC entrepreneurs who are committed to improving health outcomes for everyone.”
Zeal Capital Partners is headquartered in Washington, DC. Founder Nasir Qadree believes that more diverse companies need more inclusive sources of funding. He even trademarked the term “Inclusive Investing” to convey that these companies are baking diversity into every investing decision they make.
“We fundamentally believe that while there is ample diverse talent with innovative solutions to social disparities, there is not ample opportunity to leverage that talent into scalable impact,” said Qadree, founder and managing partner of Zeal Capital Partners. “By investing in dynamic, often-overlooked founders, our vision is to support founders in solving some of society’s biggest challenges, like narrowing the skills gap and reducing wealth barriers for the marginalized. We look forward to working with Synchrony to help scale high-growth early-stage companies that will generate outsized returns while making an impact.”
A commitment to change
This announcement is part of a broader effort by Synchrony to support minority-owned small businesses. The Synchrony Foundation has committed $5 million to support funding of small business grants through community organizations, including the Local Initiatives Support Corporation (LISC), to provide emergency grants to minority- and women- owned businesses. In 2020, the company also signed the National Venture Capital Association’s (NVCA) human capital pledge. This is a pledge to advance a more diverse and inclusive venture ecosystem. Synchrony is a member of the National Minority Supplier Diversity Council. As a member, the company is identifying and using diverse suppliers whenever possible.
Synchrony (NYSE: SYF) is a premier consumer financial services company. We deliver a wide range of specialized financing programs, as well as innovative consumer banking products, across key industries including digital, retail, home, auto, travel, health and pet. Synchrony enables our partners to grow sales and loyalty with consumers. We are one of the largest issuers of private label credit cards in the United States; we also offer co-branded products, installment loans and consumer financing products for small- and medium-sized businesses, as well as healthcare providers. Synchrony is changing what’s possible through our digital capabilities, deep industry expertise, actionable data insights, frictionless customer experience and customized financing solutions.