Last summer, in the wake of George Floyd’s murder, Best Buy committed to “do better” when it came to supporting communities of color. As part of the retail giant’s self-proclaimed mission to better address underrepresentation and technology inequities, the company announced today that it is investing up to $10 million in Brown Venture Group.
Minnesota-based Brown Venture Group is a three-year-old venture capital firm that has pledged to exclusively back Black, Latino and Indigenous technology startups in “emerging technologies.” Black and Latin communities were the recipients of just 2.6% of total funding in 2020, according to Crunchbase data.
Brown Venture Group is in the process of fundraising for its targeted inaugural $50 million fund, 75% of which has been committed, according to its principals. This means that Minneapolis-based Best Buy’s pledge to invest “up to $10 million” could represent as much as 20% of the total capital raised, making it a lead LP in the fund.
Brown Venture Group co-founder and managing partner Dr. Paul Campbell said that in the early days of forming the firm, he and co-founder Dr. Chris Brooks were told by “multiple people locally” that they should leave the Twin Cities metro area because “all the capital was on the coasts.”
“We just made a firm decision in the very early stages to stay put in the Twin Cities and that we wanted this to be a Twin City story,” Campbell told TechCrunch. “So when we thought about our Twin Cities ecosystem and who we wanted to be leading partners with, Best Buy was at the top of the list. So we are just more than excited to have Best Buy as a lead LP in our fund.”
For its part, Best Buy — which notched $47 billion in revenue last year — said the move is aimed at helping “break down the systemic barriers often faced by Black, Indigenous and people of color (BIPOC) entrepreneurs — including lack of access to funding — and empowering the next generation within the tech industry.”
The company added: “The partnership with Brown Venture Group will work toward making the technology startup landscape more inclusive and creating a stronger community of diverse suppliers.”
In conjunction with announcing Best Buy’s commitment to the fund, the company and venture firm said they would jointly launch an entrepreneurship program at Best Buy Teen Tech Centers to help develop young entrepreneurs through education, mentorship, networking and funding access.
Brown Venture Group — whose name was chosen to represent an “inclusive” skin color of the groups it represents — has signed letters of intent with five BIPOC-led portfolio companies and is leading the seed round of investment for Ecolution.
Ten million dollars seems like a drop in the bucket for a company that generated sales of $47 billion last year. Best Buy said this initiative is just one of several that it has underway to support BIPOC businesses, including plans to provide $44 million to expand college prep and career opportunities for BIPOC students and a pledge to spend at least $1.2 billion with BIPOC and diverse businesses by 2025. The company has also said that by 2025 it will fill one out of three new non-hourly corporate positions with BIPOC employees and hire 1,000 new employees to its technology team, with 30% of them being diverse, specifically Black, Latinx, Indigenous and women.
“We’re committed to taking meaningful action to address the challenges faced by BIPOC entrepreneurs,” Best Buy CEO Corie Barry said in a written statement. “Through partnerships like this, we believe we can begin to do this by helping to build a stronger, more vibrant community of diverse innovators in the tech industry, some of whom we hope will become partners of Best Buy in the future.”