SoftBank's Opportunity Fund has made the health insurance startup Vitable Health the first public commitment from its $100 million fund dedicated to investing in startups founded by entrepreneurs of color.
The Philadelphia-based company, which recently launched from Y Combinator, is focused on bringing basic health insurance to underserved and low-income communities.
Founded by Joseph Kitonga, a 23-year-old entrepreneur whose parents immigrated to the U.S. a decade ago, Vitable provides affordable acute healthcare coverage to underinsured or un-insured populations and was born out of Kitonga's experience watching employees of his parents’ home healthcare agency struggle to receive basic coverage.
The $1.6 million commitment was led by the SoftBank Group Corp Opportunity Fund, and included Y Combinator, DNA Capital, Commerce Ventures, MSA Capital, Coughdrop Capital and angels like Immad Akhund, the chief executive of Mercury Bank; and Allison Pickens, the former chief operating officer of Gainsight, the company said in a blog post.
“Good healthcare is a basic right that every American deserves, whoever they are," said Paul Judge, the Atlanta-based Early Stage Investing Lead for the fund and the founder of Atlanta's TechSquare Labs investment fund. "We’ve been inspired by Joseph and his approach to addressing this challenge. Vitable Health is bridging critical gaps in patient care and has emerged as a necessary, essential service for all whether they’re uninsured, underinsured, or simply need a better plan for their lifestyle."
SoftBank created the opportunity fund while cities around the U.S. were witnessing a wave of public protests against systemic racism and police brutality stemming from the murder of the Black Minneapolis citizen George Floyd at the hands of white police officers. Floyd's murder reignited simmering tensions between citizens and police in cities around the country over issues including police brutality, the militarization of civil authorities and racial profiling.
SoftBank has had its own problems with racism in its portfolio this year. A few months before the firm launched its fund, the CEO and founder of one of its portfolio companies, Banjo, resigned after it was revealed that he once had ties to the KKK.
With the Opportunity Fund, SoftBank is trying to address some of its issues, and notably, will not take a traditional management fee for transactions out of the fund “but instead will seek to put as much capital as possible into the hands of founders and entrepreneurs of color.”
The Opportunity Fund is the third investment vehicle announced by SoftBank in the last several years. The biggest of them all is the $100 billion Vision Fund; then last year it announced the $2 billion Innovation Fund focused on Latin America.