SoftBank has launched a second fund under its Opportunity Growth Fund to raise and invest $150 million in Black and Latino-led startups.

The Japanese conglomerate is also rebranding the effort, calling it ‘Open Opportunity Fund,’ and has appointed Paul Judge as its chairman. Judge, who was part of the investment committee at the fund before the rebrand, alongside affiliates from his Panoramic Ventures, will become co-owners of Open Opportunity Fund (OOF) alongside Softbank.

The second fund aims to exceed the initial scope of the first effort, which invested $100 million in 75 companies led by Black and Latino individuals, including Greenwood, Career Karma, and Praxis Labs. The new fund hopes to deploy the $150 million within three years. Softbank will be a limited partner in OOF.

“The key point in changing the name is that we’re opening access for others to invest in the fund and to grow more scale,” Judge told TechCrunch. “The lack of funding for Black and Latino founders is still tens of billions away from parity; this is another step in making sure we bring more opportunity to those talented founders.”

The Opportunity Growth Fund was launched in 2020 by SoftBank’s then-COO Marcelo Claure, alongside Judge, managing partner Shu Nyatta and TaskRabbit CEO Stacy Brown-Philpot. It has seen seven exits thus far, and has invested in five unicorns, including Cityblock Health and Brex.

Last year, the fund briefly became an ‘evergreen fund,’ meaning it had an open-ended fund structure that let it re-invest capital without constraints and invest across stages.

Judge says OOF is taking that one step further: “Fund 2 is a traditional closed-ended vehicle instead of an open-ended evergreen fund. The most important distinction is the move from the sole LP of SoftBank to opening access for other LPs to invest.”

Funding raised by Black founders dipped last year from 2021, accounting for a mere 1% of the $215.9 billion invested in U.S. startups last year, according to Crunchbase.

Judge hopes the organizations that pledged to back minority founders in the past few years will see this fund as a chance to finally do so with the opportunity to come on as a limited partner.

Softbank said its other funds, such as Vision Fund 2, will continue to invest selectively within the OOF portfolio. Sixty-one percent of the fund’s portfolio are Black-owned companies, while 43% are Latino-founded (the number adds up to more than 100% because some companies identify as Afro-Latino.) Women-founded companies, including non-Black and Latino women, comprise 12% of the portfolio.

OOF plans to continue investing across stages (about half of Fund 1 was invested in early-stage companies and the rest in growth-stage companies). This is good news for founders of color who need to fund their growth-stage startups as they scale.

SoftBank appears confident about its ability to deliver. It says its Vision Fund 2 and Latin America Fund have invested nearly $600 million into portfolio companies within OOF. That, combined with the initial $100 million investment from OOF’s Fund 1, means SB has invested $700 million into Black and Latino-led businesses (not including other diversity efforts, such as its Latin America Funds and separate investments into Black and Latino-founded companies).

“Scaling this is really about enabling more founders to solve problems,” Judge said. “In doing so, they make the world better; they build a company that’s valuable and deliver returns to investors. It creates an impact on many different levels.”

This piece was updated to reflect Judge’s title as chairman.

SoftBank rebrands Opportunity Fund, will invest $150 million in Black and Latino-led startups by Dominic-Madori Davis originally published on TechCrunch