Bank of America takes anchor investor role for diverse Mendoza fund

(Bloomberg) --Bank of America Corp. was an anchor investor for a new $100 million fund managed by Mendoza Ventures, which backs companies with founders from minority and other diverse backgrounds in the financial-technology, artificial-intelligence and cybersecurity industries. 

The investment "underscores our ongoing efforts to address the persistent gap in access to growth capital for minority and women-led businesses," Renee Nalbandyan, a director of global corporate strategy at Bank of America, said in an emailed statement. 

Grasshopper Bank also backed the fund, which has held a first close and is targeting a gross return of more than 36%, or a multiple on invested capital of between four and eight. 

The Boston-based venture-capital firm, led by Latinx co-founders Adrian Mendoza and Senofer Mendoza, said it allocated 80% of its second fund to underrepresented founders. Its earlier funds have backed startups including Alyce, a platform that uses artificial intelligence for corporate gifting; Listo, which delivers financial-services products including loans and insurance to the Latin American community; and Daylight, a neobank that serves the LGBTQIA+ community. 

Following the murder of George Floyd in 2020 and a rise in hate crimes against Asian-Americans, Bank of America pledged $1.25 billion toward advancing racial equality and economic opportunity, including by backing venture-capital firms started by Black, Hispanic-Latino, Asian, Native American and other underrepresented minorities.

In November, the bank made an investment in a fund managed by High Street Equity Partners, an early stage venture-capital firm that supports diverse entrepreneurs. It has previously backed firms including Serena Williams's Serena Ventures, Harlem Capital, Fearless Fund and VamosVentures.