SoftBank's First Diversity Fund Investment: Healthcare Focus

Vitable Health marks the initial investment from SoftBank’s Opportunity Fund, a $100 million initiative designed to support startups established by entrepreneurs of color.

The company, headquartered in Philadelphia and a recent graduate of Y Combinator, concentrates on delivering accessible health insurance options to communities with limited resources and lower incomes.

Vitable was founded by Joseph Kitonga, a 23-year-old entrepreneur whose family immigrated to the United States ten years prior. The company offers reasonably priced, short-term healthcare coverage to individuals who are inadequately insured or have no insurance at all. Its origins lie in Kitonga’s observations of the difficulties faced by employees at his parents’ home healthcare agency in obtaining essential coverage.

This $1.6 million investment round was spearheaded by the SoftBank Group Corp Opportunity Fund, with participation from Y Combinator, DNA Capital, Commerce Ventures, MSA Capital, Coughdrop Capital, and individual investors including Immad Akhund, CEO of Mercury Bank, and Allison Pickens, former COO of Gainsight, as detailed in a company blog post.

Paul Judge, the Atlanta-based Early Stage Investing Lead for the fund and founder of Atlanta’s TechSquare Labs, stated, “Every American, regardless of background, deserves quality healthcare. We are impressed by Joseph’s dedication to tackling this issue. Vitable Health is filling vital gaps in healthcare access and is becoming a crucial service for those without insurance, with insufficient coverage, or seeking a more suitable healthcare plan.”

The creation of the Opportunity Fund coincided with widespread demonstrations across the U.S. protesting systemic racism and police brutality following the death of George Floyd, a Black man, at the hands of white police officers in Minneapolis. This event intensified existing tensions between communities and law enforcement regarding issues such as police misconduct, the increasing militarization of police forces, and racial profiling.

Earlier this year, SoftBank encountered its own challenges related to racism within its investment portfolio. The CEO and founder of Banjo, a portfolio company, stepped down after past affiliations with the KKK came to light shortly before the fund’s launch.

Through the Opportunity Fund, SoftBank aims to address these concerns and has committed to foregoing traditional management fees, instead prioritizing the allocation of capital directly to founders and entrepreneurs of color.

The Opportunity Fund represents the third investment platform introduced by SoftBank in recent years, following the $100 billion Vision Fund and the $2 billion Innovation Fund, which focuses on investments in Latin America.