PayPal has been sued by Nisha Desai, an Asian American businesswoman, who claims the company’s $535 million investment program unfairly limits funding to Black and Latino applicants.
Desai, in cooperation with her New York-based venture capital firm Andaf Capital, filed the lawsuit on Thursday in Manhattan federal court.
Desai said she applied to PayPal’s program, which was launched in June 2020 to support minority-owned businesses, but the company stopped responding after six weeks. Meanwhile, PayPal invested $100 million in 19 companies led by Black and Hispanic individuals, according to the lawsuit.
The complaint also states that PayPal told Desai and other Asian businesswomen that they were not eligible for financing. “For PayPal and its executives, Asian Americans may be minorities, but they are the wrong kind of minority,” the lawsuit says.
Desai accuses PayPal of violating federal and state laws prohibiting racial discrimination, including the Civil Rights Acts of 1866 and 1964. It is seeking damages and wants the court to prohibit PayPal from considering race or ethnicity in its financing decisions.
This lawsuit follows a similar case against Pfizer last year, in which the advocacy group Do No Harm objected to a program for black, Latino, and Native American applicants. This case was dismissed because the group failed to show harm to its members.
Desai is represented by Consovoy McCarthy, the same law firm that handled the Pfizer case. Neither PayPal nor the law firm commented on the new lawsuit.