Amazon has announced it plans to invest $150 million in venture capital firms that are backing Black entrepreneurs.

The online retailer said it plans to invest in more than 10 funds that are supporting 200 businesses that are at or near the seed stage of development through 2023. It focuses on Black, Indigenous, Latino, women and LGBTQIA+ founders.

“We’ve seen incredibly innovative ideas from underrepresented entrepreneurs—from companies offering inclusive health services for women to startups helping companies mitigate climate impact for underserved communities—and we’re convinced that an inclusive investment strategy leads to better returns and innovation. We want to ensure that these companies and their founders have the same access to capital as anyone else,” Peter Krawiec, Amazon’s senior vice president of worldwide corporate development, said in a statement.

In addition to the capital investment from Amazon, the companies in the fund’s portfolio will receive mentorship from Amazon executives and access to technical resources and tools to encourage growth.

Black wealth funds making an impact

Collide Capital, a Black-owned seed and pre-seed venture capital fund, is one of the many firms in which Amazon has invested. Founded by Aaron Samuels, co-founder of AfroTech, and Brian Hollins, a founding board member of BLCK VC, Collide Capital has backed over 40 companies, of which over 80 per cent are led by Black, Latino and female founders.

One of the companies Collide Capital has recently supported is fintech startup EMTECH.

A Black-owned company, EMTECH, builds digital payment infrastructure for companies and provides a framework for businesses to digitize the application review process, regulatory sandboxes, licensing, compliance and supervision.

“We are focused on addressing financial inclusion across the globe, and Collide Capital has been an investor in us from the early days. Collide has helped us to shape our vision and opened up access to future rounds of funding,” Carmelle Cadet, founder and CEO of fintech startup EMTECH, said in a statement.

“EMTECH discovered a unique value proposition in rebuilding central banking infrastructure for the Web3 era. As a Black woman-founded tech company, having Collide get excited about our vision was critical to our journey. We are better with them as partners, and I am excited to see how Amazon is supporting them to help even more entrepreneurs like me.”

Other funds named as a part of Amazon's $150-million investment include:

Elevate Future Fund — Overseen by Energy Impact Partners, the fund focuses on increasing funding to underrepresented founders working on solutions to accelerate the transition to a more sustainable and clean energy future. It collaborates closely with Amazon’s Climate Pledge Fund, which invests in emerging climate technology companies.

Share Ventures — Share Ventures is a Los Angeles-based venture fund and venture foundry focused on human performance. Share invests in health tech, future of work, people tech, fintech, transportation, and purpose tech (companies facilitating impact and change).

Techstars Rising Stars Fund — With its first investments in 2022, the Rising Stars Fund is a pre-seed venture capital fund investing in underrepresented founders of colour in the U.S. The fund is part of the Techstars investment business, providing access to capital, one-on-one mentorship, and customized programming for early-stage entrepreneurs.

Amazon tackling poor record on diversity, equity and inclusion (DEI)

While the investment is a welcomed step for many, some have been critical of Amazon’s track record regarding diversity, equity and inclusion.

In June, Amazon lost two of its most senior Black leaders. Alicia Boler Davis left as a senior vice president of global customer fulfillment, advising CEO Andy Jassy. Former vice president Dave Bozeman, who also departed, was credited for “building and developing (Amazon’s) middle-mile network” for shipping.

While the company has been mum on the percentage of Black executives in its senior ranks, the online retailer said it is committed to diverse leadership and saw a nearly 70 per cent increase in Black directors and vice presidents in 2021 from the previous year, according to Reuters.

Also, a manager filed a lawsuit against Amazon last year, alleging that Black people were hired for lower-level positions and advanced more slowly than white employees.

Still, through its Amazon Web Services (AWS) Impact Accelerator program, the company invested $30 million to help underrepresented entrepreneurs. Additionally, in 2021, Amazon committed $150 million to its Black Business Accelerator, an initiative to help Black business owners succeed as sellers in Amazon’s stores.