Fintech Synchrony Promises $15 Million to Early Stage Venture Capital Funds Led by Minorities

By McKenzie Carpenter Thursday, May 20, 2021

Synchrony, a consumer fintech company, announced it will allocate $15 million to minority-led early-stage venture capital funds to support underrepresented groups.

A young Black entrepreneur.

About Synchrony

Based out of Connecticut, Synchrony is a consumer fintech business that offers financial services in many different industries such as retail, healthcare, automotive, and more. The bank provides financial services like credit cards, installment loans, financing for small and medium-sized businesses (SMEs), savings products, and other products.

According to the fintech business, more than $139 billion in sales have been financed through Synchrony. Additionally, the company has roughly 68.5 million active accounts. Furthermore, the fintech business has supported more than $62.8 billion in deposits.

Synchrony has partnered with several large corporations, including Amazon, Lowe’s, PayPal, Verizon, JCPenney, and several others. Google Finance estimates the company is worth about $26.7 billion.

$15 Million Commitment

The fintech business announced it is investing $15 million in early-stage venture capital funds that are led by Black, Latinx, and female founders. Three venture capital funds have already been selected: ChingonaVentures, Seae Ventures, and Zeal Capital Partners.

Trish Mosconi, executive vice president, chief strategy officer, and corporate development at Synchrony, said in a statement, “For too long, Black, Latinx, and female founders have been underrepresented in venture capital funding...Together we must take collective action to help close the venture funding gap and provide equal access to capital for diverse entrepreneurs and underserved communities.”

Chingona Ventures primarily invests in pre-seed and seed startup companies that have raised less than $1 million in funding. The venture capital business particularly invests in women, food, wellness, and other similar startup companies. Chingona Ventures invests an average of $100,000 to $250,000 in each startup.

Seae Ventures primarily invests in early-stage healthcare startup companies that are technology-focused in the industry. Clinify Health, Functional Fluidics, and Hurdle are a few startups Seae Ventures has invested in. The business does not disclose how much it invests on average.

Zeal Capital Partners invests in pre-seed, seed, and Series A fintech. Additionally, the business funds employment startup companies with more than $200,000 in annual revenue and are attempting to “bridge America’s Wealth and Skills gap,” according to the company. Zeal Capital Partners has invested in Esusu, Kanarys, and YearOne. It is unclear how much the venture capital firm invests in each startup.

Synchrony has not disclosed how much each venture capital fund will receive. However, the company added that other minority-led venture capital funds will be selected later this year. In addition, Synchrony stated that this new $15 million commitment to financing diversity is part of its larger commitment to endorse minority-owned businesses.

The United States (US) Senate Committee on Small Business and Entrepreneurship reported that while minority groups account for 32% of the total US population, only 18% of that population owns a business. Additionally, Forbes reported in 2018 that minority-owned small businesses have a significantly harder time gaining funding due to lower net worth, little to no credit history, and other factors. If they do receive funding, minorities often receive smaller amounts with higher interest rates.

About the Author

Headshot of McKenzie Carpenter

McKenzie Carpenter is a graduate of Central Michigan University with a B.A.A. in Integrative Public Relations and French. McKenzie has previously worked for small businesses and nonprofit organizations.

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