BofA, Ford Foundation, other big LPs pile into diverse-led Kapor Capital’s third fund

Kapor Capital, a social impact investor, has raised $126 million for its third fund from a lengthy list of brand-name investors.

The Oakland, California-based firm was founded in 2011 by Mitch Kapor and Freada Kapor Klein, who provided $25 million for its first fund in 2015 and another $60 million for Fund II in 2018. The couple announced in a blog post in May that they were stepping back and that Brian Dixon and Ulili Onovakpuri had been named managing partners to lead the firm.

“Mitch and I are incredibly proud of [Dixon and Onovakpuri] and know they will continue to be leaders in transforming the tech and VC ecosystem so that real problems are solved by entrepreneurs whose lived experience drives their passion to transform the quality of daily life in low-income communities and communities of colour,” Kapor Klein said in a statement about the new fund.

Fund III represents the first time Kapor Capital has accepted outside investors. About 70 LPs signed on, including Align Impact, Bank of America, Blue Cross and Blue Shield of Louisiana, California Wellness Foundation, Cambridge Associates, EIP Elevate Future Fund, Footlocker, Ford Foundation, National Geographic Society, PayPal, Southern Poverty Law Center, Stardust Equity, Twilio and Winthrop Rockefeller Foundation, according to the statement.

Kapor Capital launched fundraising for Fund III in June 2021 and held an initial close on about $97 million from 57 investors in February, according to an SEC filing.

So far, Fund III has invested in 15 companies, including Cayaba Care, a maternity support service, and Daylight, a digital banking platform for the LGBTQ+ community. All 15 of the companies have a founder who identifies as an underrepresented person of colour, Kapor said. About 46 percent of the companies have a founder who identifies as a woman and 53 percent have a founder who identifies as Black, the firm added.

“Fund III is the culmination of years of work championing tech start-ups that revolutionise people’s lives across a vast set of industries,” Dixon said in the statement. “I’m excited to continue to demonstrate the positive outcomes that investing generates – from creating new jobs, to providing growth opportunities to underrepresented groups, to solving critical problems for low-income communities and communities of colour.”

Roy Swan, a director of mission investments at Ford Foundation, said of the foundation’s commitment: “Investing in innovative people and ideas is what fuels economic and societal progress, but far too often access to that capital is unequal and unbalanced. We are thrilled to partner with Kapor Capital to ensure that the bright minds looking to transform our industries have the resources they need to soar.”