PayPal is being sued by Nisha Desai, an Asian American businesswoman, who claims the company’s $535 million investment program unfairly limits funding to Black and Hispanic applicants.
Desai, along with her New York-based venture capital firm Andav Capital, filed the lawsuit on Thursday in Manhattan federal court.
Desai said she applied for PayPal’s program, launched in June 2020 to support minority-owned businesses, but the company stopped responding after six weeks. Meanwhile, PayPal invested $100 million in 19 firms led by Black and Hispanic individuals, according to the lawsuit.
The complaint also states that PayPal told Desai and other Asian businesswomen they were not eligible for funding. "To PayPal and its executives, Asian Americans might be minorities, but they're the wrong kind of minority," the lawsuit alleges.
Desai accuses PayPal of violating federal and state laws that prohibit racial discrimination, including the Civil Rights Acts of 1866 and 1964. She is seeking damages and wants the court to stop PayPal from considering race or ethnicity in its funding decisions.
The lawsuit follows a similar case against Pfizer last year, where the advocacy group Do No Harm challenged a program for Black, Hispanic, and Native American applicants. That 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 has commented on the new lawsuit.
