Bank of America takes anchor investor role for diverse Mendoza fund

Bank of America 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.

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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.