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Venture Fund Founder Sues PayPal, Alleging Racial Discrimination

Andav Capital and Nisha Desai allege PayPal excluded the fund from an investment initiative because Desai is Asian American. A 2025 ruling let two claims proceed, but did not decide whether discrimination occurred.
From TheFinanceBase Team3 min to read
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Andav Capital and its founder, Nisha Desai, sued PayPal Holdings and PayPal Ventures in federal court on January 2, 2025, alleging that PayPal excluded Desai’s fund from an investment initiative because she is Asian American. A December 19, 2025 court order dismissed two of the four claims but allowed claims under federal law and New York City law to proceed past the motion-to-dismiss stage. The court did not decide whether discrimination occurred.

What the lawsuit is about

The case, Andav Capital and Nisha Desai v. PayPal Holdings, Inc. and PayPal Ventures, No. 1:25-cv-00033, was filed in the U.S. District Court for the Southern District of New York. Andav Capital is a venture fund founded by Desai.

According to the plaintiffs, PayPal’s 2020 investment initiative favored Black- and Latino-led firms and excluded Desai’s fund because she is Asian American. Those are allegations in a lawsuit, not findings by a court. The dispute concerns access to an investment initiative—not alleged discrimination in PayPal’s ordinary consumer payment service.

TechCrunch reported that the complaint alleged the initiative involved $100 million and 19 funds. Those figures are allegations reported from the complaint, not amounts or participation figures established by the court. The report described PayPal’s commitment as $530 million; Judge Jesse M. Furman’s later opinion described the announced allocation as $500 million, based on the amended complaint. The sources therefore give different figures, and neither establishes that the full amount was invested. TechCrunch’s January 3, 2025 report and the court’s December 19, 2025 opinion describe the claims and figures.

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How the case has progressed

  • 2020: PayPal announced an initiative to support Black and minority-led businesses. The reported commitment is $530 million in TechCrunch’s account and $500 million in the court opinion’s description of the amended complaint.
  • January 2, 2025: Andav Capital and Desai filed suit in the Southern District of New York. TechCrunch reported the complaint’s allegations the following day.
  • May 7, 2025: The amended complaint added a claim under the Equal Credit Opportunity Act (ECOA), according to Gibson Dunn’s December 2025 case update. The court’s opinion confirms that the ECOA was among the claims before it.
  • December 19, 2025: Judge Furman ruled on PayPal’s motion to dismiss, dismissing the ECOA and New York State Human Rights Law claims while allowing claims under 42 U.S.C. § 1981 and the New York City Human Rights Law to proceed past that stage.

Which claims survived the December 2025 ruling?

The amended complaint asserted four causes of action. The court’s ruling was mixed, not a decision wholly for either side:

Claim December 19, 2025 outcome Reason or significance
42 U.S.C. § 1981 Survived the motion to dismiss The court denied PayPal’s motion as to this claim. That does not establish that the allegations are true.
New York City Human Rights Law (NYCHRL) Survived the motion to dismiss The court denied PayPal’s motion as to this claim; it remains to be resolved in the case.
Equal Credit Opportunity Act (ECOA) Dismissed The plaintiffs had not pleaded that they were applicants for credit.
New York State Human Rights Law (NYSHRL) Dismissed The plaintiffs had not pleaded that they were applicants for credit. The court declined to grant leave to amend the dismissed claims.

A motion to dismiss tests whether pleaded claims can proceed under the applicable legal standards; it is not a trial and does not determine whether the remaining allegations happened. In its opinion and order dated December 19, 2025, the court stated: “For the reasons given below, Defendants’ motion is GRANTED in part and DENIED in part.”

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What is known about the case’s status

The December 19 order directed PayPal to answer the remaining claims within four weeks, unless otherwise ordered, and scheduled an initial pretrial conference for January 27, 2026. The accessible docket information does not establish whether the conference occurred, whether answers were filed, or whether the case was later resolved. The case listing identifies the suit and early docket details but does not verify activity after the December order. No later outcome is established here.

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What PayPal said publicly

TechCrunch reported that PayPal spokesperson Taylor Watson declined to comment, citing pending litigation. That was not a substantive response to the discrimination allegations. Plaintiffs’ counsel Patrick Strawbridge was quoted saying, “PayPal discriminated against Ms. Desai based on her race”; that is counsel’s position, not a judicial finding. TechCrunch’s report attributes both statements.

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