This article is available in Spanish in partnership with El Planeta Media. Este informe está disponible en español, traducido por El Planeta Media.
Mendoza Ventures, a Boston firm known for its investments in underrepresented founders, has made the first close on its new $100 million fund.
The investment was led by Bank of America with participation from Grasshopper Bank and other undisclosed investors. Senofer Mendoza, founder and general partner of Mendoza Ventures, declined to disclose the investment amount, citing Bank of America’s policies.
“I can say we’re off to a great start,” Mendoza said.
Mendoza said the firm will likely finish raising the capital for its third fund around June 2024. But Mendoza said she’s already written the first check from this fund to a Boston-based female founder. They expect to announce more details about the new portfolio company later this month.
Mendoza Ventures was founded in 2016 by Senofer and husband Adrian Mendoza. The firm bills itself as the first LatinX-owned venture fund on the East Coast. It backs startups in fintech, AI and cybersecurity at the Series A and B stages. Last year, Mendoza Ventures signed a new lease for an office on Newbury Street and expanded to San Francisco with the hiring of the West Coast-based fintech veteran Asya Bradley as a senior partner.
The firm has invested in 13 companies through its first two funds, Mendoza said, including four Massachusetts-based companies. Its investments have gone to companies like Listo, which provides financial-services products to the Latin American community, and the Boston-based cybersecurity company Wabbi.
Mendoza said the capital from their second fund is largely deployed, with the exception of follow-ons. The firm reported 80% of the capital from its second fund went to underrepresented founders, which they define as female, immigrant, people of color, or LBGTQ leaders.
Mendoza said investing in underrepresented founders is even more important as venture capitalists predict a year of more difficult fundraising conditions.
“The thing that makes us really excited about doing this first close when we did it, is that when people tighten their belts, it doesn’t impact the economy equally. And so, we’re seeing, even in the last round of stats from 2022, less money going to underrepresented founders,” Mendoza said.
Following the murder of George Floyd and nationwide racial reckoning in 2020, members of the business community committed capital to diverse-led businesses and funds. Mendoza said Bank of America is one of the organizations that is making this a long-term commitment. The anchor funding for Mendoza Ventures’ third fund comes from over $400 million which Bank of America allocated to investments in mission-focused venture funds.
“Bank of America is certainly continuing the commitment. And I think from the inside, one of the things that I see them doing exceptionally well is that it has become part of the fabric of their bank. And that is the way that, traditionally, inclusionary or diverse initiatives are able to survive,” Mendoza said. “If it is a separate but equal solution, that tends not to thrive.”
