MassMutual launches $50 million fund to support minority-owned businesses

Insurance company MassMutual has pledged $50 million to invest in small Black-owned businesses in their early and mid-stages, as well as tech and sustainability-focused companies in Massachusetts.

Through its MM Catalyst Fund (MMCF), the company aims to create a lasting impact on Massachusetts’ entrepreneurial environment. MassMutual intends to apply the approach of driving growth and capital for these businesses to see that they thrive.

The fund will be evenly divided into two sleeves of $25 million each. The first half will be allocated toward tech and sustainability, while the other half will be allocated toward the development of small Black businesses.

The insurance company is seeking businesses that “will create positive economic impact” in Massachusetts. Early-stage businesses must have significant market traction. While mid-stage companies must have annual recurring revenue of at least $1 million and scalable revenue streams, according to the website.

In a press release, the company said the fund will distribute investments of $250,000 to $2.5 million for companies in its business portfolio. However, the investment decisions will be based on closing wealth gaps and promoting racial diversity.

Ultimately, MassMutual hopes to use this fund to boost Massachusetts’ less economically developed areas through employment opportunities and business growth. In turn, this will produce massive investment outcomes for the state.

“Impact investing at MassMutual seeks to create a positive social and environmental impact that is measurable while also making market-rate financial returns,” said Rilwan Meeran, MassMutual Impact Investment Portfolio Manager, in a statement. “Philanthropy alone cannot solve our society’s problems; institutional capital investment should also play a role.”

According to MassMutual, the core of its MMCF investment and operational values is commitment to diversity and inclusion. In December, the company hired a head of supplier diversity, Regina Heyward, who formerly held a similar role at Wells Fargo & Co. MassMutual CEO Roger Crandall is also a member of the national group CEO Action for Diversity and Inclusion.