The founder of the investment fund is suing PayPal, alleging racial discrimination
PayPal has been sued by the founder of investment firm Andav Capital, Nisha Desai, who claims she was excluded from the payment giant’s diversity and equity program because she is Asian. According to the lawsuit filed this week.
In 2020, PayPal committed $530 million to support more Black and minority-led businesses In the wake of Black Lives Matter. In the newly filed lawsuit, Desai claims she applied to be considered for a financial commitment but was ignored because she is Asian, as the program sought to focus exclusively on Black and Hispanic-led businesses.
Desai launched Andav Capital in 2018, according to PitchBook, to invest in early-stage companies. The investment firm has made at least 13 investments, including in fintech startup Acorns, startup funding marketplace IFundWomen, and environmental technology company Kubik.
“Money held by individuals of other races, including Asian Americans, does not receive equal attention,” Desai alleges in the lawsuit filed in federal court in New York. “What’s worse is that PayPal and its senior management have repeatedly touted the program’s focus on race, and bragged in statements and press releases that PayPal’s program is for some races and ethnicities and not others.”
When TechCrunch reached out to a PayPal spokesperson, Taylor Watson declined to comment on the case citing pending litigation.
In her lawsuit, Desai claims she met multiple times with executives at PayPal and its investment arm, PayPal Ventures, about her qualifications for a financial grant, with Desai alleging that PayPal’s head of public policy and research explicitly told her in a July 2020 meeting that the program favors companies that It is led by blacks and Hispanics “over other races and ethnicities, including Asian Americans.”
When PayPal announced its first investment of a $530 million commitment, the company invested in companies with at least one black or Latino general partner, “an unmistakable racial profile that reflects PayPal’s stated race-based purpose,” the suit says.
“To date, PayPal continues to make the same race-based claims,” the lawsuit adds. “In total, PayPal has invested $100 million in 19 venture capital firms led by “Black and Latino managers,” but has announced as little as $1 in funding for funds led by Asian American women — despite their clear interest and suitability. …For For PayPal and its executives, Asian Americans may be minorities, but they are the wrong kind of minority and PayPal has not announced the end of the program.
Desai claims her rejection of PayPal’s investment commitment cost her company “millions of dollars’ worth of vital capital.” The lawsuit also alleges that those who received PayPal checks were “able to leverage those rewards into additional investments, increased brand equity, resources, reach, and success.”
Meanwhile, funds like Desai’s that were rejected “suffered from a negative and inaccurate perception that PayPal made a decision based on the merits of its business, rather than on the basis of the fund’s ownership race,” the suit alleges.
Desai claims that PayPal violated the Civil Rights Act of 1981 and that PayPal’s “racially exclusionary investment program” is illegal under New York state and city laws prohibiting racial discrimination.
Desai is represented by Consovoy McCarthy, Conservative law firm With a history of dealing with issues related to race-based programs. The law firm sued Pfizer over its diversity program, which targeted blacks, Latinos and Native Americans, claiming… The program discriminated against white and Asian American applicantsthough The lawsuit was later dismissed. Consovoy McCarthy also filed a lawsuit against Harvard University and the University of North Carolina in 2022 over race-based admissions that later led to Help abolish affirmative action in education.
Desai did not respond to TechCrunch’s request for comment on Friday. In a brief statement shared with TechCrunch, Consovoy McCarthy partner Patrick Strawbridge said: “PayPal discriminated against Ms. Desai based on her race. This distinction is inconsistent with our laws and the spirit of the purported purpose of the PayPal Program. PayPal was a market leader and other companies followed suit, despite Ms Desai’s pleas for them to treat it fairly. We look forward to proving her case and achieving justice in court.
Desai joins other individuals and organizations suing diversity schemes for targeting only black and Hispanic communities. It is worth noting that Edward Bloom, the man who helped abolish affirmative action in education along with Consovoy McCarthy, launched the American Alliance for Equal Rights (AAER), which He went on to sue the investment firm Fearless FundAlleging that one of her scholarships discriminated against white and Asian Americans because it was only awarded to black women.
This case was settled in court, but numerous lawsuits have followed since then.
Sean O’Kane contributed reporting.
Updated with comment from Consovoy McCarthy.
