PayPal Sued for Excluding Asian American Entrepreneurs from $535 Million Investment Initiative

PayPal faces a lawsuit accusing the company of racial discrimination in its investment program.

An Asian American entrepreneur claims she was excluded from a $535 million initiative that was reportedly limited to Black and Hispanic applicants.

The lawsuit was filed alongside New York-based venture capital firm Andav Capital and is part of a broader conservative movement seeking to scale back corporate diversity, equity, and inclusion initiatives.

Nisha Desai, founder of Andav Capita, is seeking unspecified damages and demanding that PayPal stop considering race and ethnicity in its investment programs.

This legal action follows a March ruling by a Manhattan federal appeals court dismissed a similar case against Pfizer regarding its fellowship programs for underrepresented groups.

Desai alleges that PayPal informed several women entrepreneurs that they were ineligible for funding solely due to their Asian heritage.

The lawsuit claims PayPal’s actions violate several civil rights laws, including Section 1981 of the Civil Rights Act of 1866 and Section 601 of the Civil Rights Act of 1964. It also cites violations of New York State and City Human Rights Laws.

Desai, who grew up in the Deep South to immigrant parents, believed she qualified for PayPal’s investment program, which was announced in June 2020—the program aimed to support Black and minority-owned businesses.

Despite PayPal’s $100 million investment in 19 venture capital firms led by Black and Hispanic individuals, Desai claims she spent six weeks attempting to secure funding before communication ceased.

The complaint, filed in Manhattan federal court, argues that while Asian Americans may be considered a minority, this classification is overly narrow in the context of PayPal’s program.

As of the market close, PayPal’s stock was up 1.65%, ending at $87.60.