Charlotte-based Truist Financial Corp.'s (NYSE: TFC) venture capital arm is backing a female- and Latinx-founded VC firm. Truist Ventures is investing in Mendoza Ventures' early growth fintech fund as a limited partner.
It joins Bank of America Corp. (NYSE: BAC) and Grasshopper Bank as investors in Mendoza Ventures' third fund, which launched in January with a target of $100 million. The fund aims to invest in early growth-stage startups with a focus on diversity. It is expected to close next year, said Senofer Mendoza, co-founder and general partner at Mendoza Ventures.
An investment amount was not disclosed.
"Mendoza Ventures is thrilled to partner with Truist in their efforts to create a technology-driven, inclusive bank," she told CBJ. "Financial investment in diverse managers is essential in venture capital. This investment will be used to invest in fintech, AI and cybersecurity companies. It gets us closer to having financial and technology ecosystems that are representative of the people who use these products."
Boston-based Mendoza Ventures, founded in 2016, focuses on investments in fintech, AI and cybersecurity, with diversity playing a significant role in their investment decisions. It has raised two funds since its inception and had two successful exits. Mendoza Ventures is the first Latinx-owned venture fund on the East Coast.
The firm has 13 companies under its investment portfolio, with 75% of the startups led by immigrants, people of color and women. Mendoza said the firm has not deployed capital into any Charlotte businesses yet, however, it is eyeing companies across the Carolinas.
"We are excited to work closely with the Charlotte ecosystem to grow this investment," she said. "There is so much talent in North Carolina."
Mendoza Ventures visited the Carolinas, including Charlotte, for a week to get to know the Truist Ventures team, other banks in the area, local minority depository institutions and founders, she said.
"The community was incredibly welcoming, skilled and thoughtful," Mendoza said. "There is a lot of opportunity for venture capital in Charlotte."
Mendoza Ventures partnered with Truist Ventures as the bank's investment focus aligns with its mission. Founded in 2020, Truist Ventures invests in innovation, as well as a culture that supports innovation.
"We believe that representation is a good thing, and when the source of the capital represents the end users, we have healthier products, companies and communities," Mendoza said.
Truist Ventures looks for early-stage companies in financial technology and beyond, CBJ previously reported. The division often focuses on payments, big data and ways to enhance client experience.
It builds on the efforts of the bank's heritage BB&T and SunTrust institutions, which merged in 2019 to form Truist. Both had venture capital arms. Truist Ventures' first investment of $6 million was in Veem, a global payments company based in San Francisco.
Truist Ventures has 13 active companies under its portfolio, three successful exits and two businesses that have been acquired, according to its website.
