Andav Capital founder Nisha Desai is suing PayPal, claiming she was excluded from the payments giant's diversity and equity program. Charges were filed this week..
By 2020, PayPal has committed $530 million to support more Black and minority-led businesses. The awakening of Black Lives Matter. In a newly filed lawsuit, She applied to be considered for a financial commitment, but because the program sought to focus exclusively on black and Hispanic-led businesses, Desai claimed she was overlooked because she was Asian.
According to PitchBook, Desai launched Andav Capital in 2018 to invest in early-stage companies. The venture firm is fintech startup Acorns; It has made at least 13 investments, including startup funding marketplace IFundWomen and environmental technology company Kubik.
Desai alleges in the lawsuit filed in New York federal court that “most funds owned by other ethnic groups, including Asian Americans, are not given equal consideration.” “Worse, PayPal and its senior management have repeatedly played down the program's racial focus, boasting in announcements and press releases that PayPal's program is not limited to certain races and ethnicities.”
When contacted by TechCrunch, PayPal spokesperson Taylor Watson declined to comment on the case, citing pending litigation.
In her suit, Desai met several times with PayPal executives and its venture, PayPal Ventures. Desai alleges that PayPal's head of public policy and research told her in a July 2020 meeting about her qualifications for the grant. It said the program favors black and Hispanic-led companies “over other races and ethnicities, including Asian Americans.”
When PayPal announced its first investments from a $530 million commitment, the company invested in companies with at least one black or Latino general partner and “an unmistakable racial profile that reflects PayPal's stated race-based mission.”
“Even today, PayPal continues to make the same race-based claims,” the suit added. “In total, PayPal has invested $100 million in 19 venture capital firms led by 'Black and Latinx managers,' but has not announced $1 in funding for funds led by Asian-American women. … For PayPal and its executives, Asian Americans may be a minority, but they are the wrong minority. PayPal is not ending this program.”
Desai said her rejection of PayPal's investment commitment cost her company “millions of dollars worth of critical capital.” Recipients of PayPal checks “can use those rewards for additional investments; greater brand equity; resources; It can be used in terms of access and success,” the lawsuit alleges.
At the same time, Funds like Desai's, who were rejected, suffered from the bad and inaccurate perception that PayPal made the decision based on the merits of their business rather than the fund's asset race. Charged.
Desai alleged that PayPal violated the Civil Rights Act of 1981, and alleged that PayPal's “racist investment program” was illegal under New York state and city laws prohibiting racial discrimination.
Desai is represented by Consovoy McCarthy; A conservative legal firm Record of receiving cases involving race-based programs. black man specifically suing Pfizer for its diversity program targeting Latinos and Native Americans; A program that discriminates between white and Asian American applicantsbut He was later sued.. Consovoy McCarthy later sued Harvard University and the University of North Carolina in 2022 over race-based admissions. Strong action in education was resisted..
Desai did not respond to TechCrunch's request for comment on Friday. In a brief statement shared with TechCrunch, Patrick Strawbridge, a partner at Consovoy McCarthy, said: “PayPal discriminated against Ms. Desai based on her race. This discrimination is contrary to our laws and in the spirit of the alleged intent of PayPal's program. PayPal is the market leader, and Ms. Desai demanded that others treat her fairly, but others complied. Her case We look forward to being proven and getting justice in court.”
Desai joins other individuals and organizations suing for disparity programs that target only black and Hispanic communities. Most notably, Edward Blum, who along with Consovoy McCarthy fought for affirmative action in education, started the American Alliance for Equal Rights (AAER). I sued the joint venture company Fearless Fund.One of its grants was accused of discriminating against white and Asian Americans because it was only given to black women.
Although the case was settled by the court, there were many more lawsuits later.
Sean O'Kane reports.
Updated with commentary by Consovoy McCarthy.