Venture capitalists invest less than 3% of funding to Black founders, resulting in fewer success stories. Mastercard has announced the launch of a new Start Path track dedicated to supporting traditionally underrepresented fintech founders as the company continues its work to ensure minority led startups have access to the funding necessary to scale.
The new programming is part of Mastercard’s In Solidarity commitment of $500million in products, services, technology and financial support to help close the racial wealth and opportunity gap. While Start Path has historically engaged growth and expansion stage startups, this new pathway will provide support for early-stage startups led by Black, Indigenous, People of Color and women. These startups will receive stage-relevant support, including enterprise partnership readiness training, mentorship and coaching, as well as curated commercial and investor introductions. Mastercard will consider grants or investments in participating startups on a case-by-case basis.
“To achieve inclusive growth, which ensures that the benefits of a growing economy extend to all segments of society, people need access to the vital networks that power the modern economy. But access to these physical, virtual and social networks is not equally available,” said Michael Froman, Vice Chairman and President of Strategic Growth, Mastercard. “A remarkably small percentage of venture capital is invested in Black-founded startups, and the new Start Path programming track is a critical step in connecting Black entrepreneurs with the necessary resources to launch and expand their start-ups.
The first participant to join this program is SpenDebt, which automates consumer debt repayment, and joined Start Path in April. The programming was informed by insights provided by underrepresented founders, including those of Start Path alumni Goalsetter and Mobility Capital Finance. Both companies have now received capital investments from Mastercard to help provide financial services to underserved communities with a specific focus on providing tailored digital tools, and new payment cards to low wealth minority and Black communities.
“We are humbled and excited about the opportunity to leverage Mastercard’s global footprint as part of their Start Path program. The partnership validates SpenDebt in the marketplace and accelerates our growth trajectory,” said Kiley Summers, Founder, SpenDebt. “As a Black founder, it’s been extremely difficult to access capital and penetrate enterprise customer networks, but resiliency and faith have sustained us. We look forward to extending our frictionless digital payment solution to Mastercard’s partners, customers and network.”
Start Path participants receive direct access to the company’s channels, customers and product teams as well as immersive virtual events and programming to uncover co-innovation and growth opportunities. All startups will also be paired with a dedicated Start Path sponsor who will act as their program champion and work to ensure they receive relevant support, as well as a Mastercard mentor whose expertise matches their business area.
Support for Small Businesses
Mastercard has long been an advocate for the small business community and reinforced its investments through launch of the Strivers Initiative. The campaign is dedicated to elevating Black entrepreneurs overcoming obstacles to maintain and grow their business, and who can act as role models for the community and future generations, while encouraging consumers and businesses alike to shop, share and support them.
The Start Path program introduction furthers Mastercard efforts to ensure access to capital for underserved entrepreneurs. This includes investments in venture capital firms and equitable investment organisations including Fearless Fund, CNote, Authentic Ventures and the Astia Fund to ensure minority-led startups can access the capital they need to successfully grow their businesses affordably and efficiently.
Mastercard has also partnered with Community Development Financial Institutions (CDFIs), including Grameen America, Accion Opportunity Fund, and the Community Reinvestment Fund, USA, to expand access to capital and loan relief for underserved communities, with $250million delivered since 2018.
These efforts are delivering on Mastercard’s sustained commitment to building a more inclusive digital economy including its commitment to bring 50 million small and medium-sized businesses into the digital economy, specifically helping 25 million women entrepreneurs grow their businesses.