Accion, a non profit that supports microfinance institutions globally, has announced that its seed-stage investment initiative Accion Venture Lab is adding $33 million to its initial capital pool, with the launch of a new $23 million fund, and an additional, separate $10 million investment from Accion.
The new fund comes from a group of third-party impact and commercial investors, bringing Venture Lab's total capital under management to $43 million, more than four times the initial amount.
Launched in 2012 with $10 million in capital, Accion Venture Lab invests in fintech startups at the seed stage.
Venture Lab Managing Director Vikas Raj said,
"There is strong potential for inclusive fintech startups to reach historically underserved communities while generating returns, and the oversubscription of the Accion Venture Lab fund is great validation of our early work investing in more than 40 innovative businesses operating in 30 markets. This new pool of capital enables us to scale our efforts and remain at the forefront of seed stage investing in inclusive fintech."
Investors in Accion Venture Lab now include FMO, the Dutch entrepreneurial development bank; the Ford Foundation; the ImpactAssets Giving Fund of Blue Haven Initiative; Heifer Foundation; MetLife Foundation; Open Society Foundations; Pace Able Foundation; Proparco, the French Development Agency (AFD)'s private sector financing arm; Prudential Financial; Stichting Hivos-Triodos Fund, managed by Triodos Investment Management; and Visa Inc.
"Despite progress, three billion people still have no safe or simple way to save money, get a loan to build a business, pay a bill, or protect their health and property with insurance," said Michael Schlein, President and CEO of Accion.
"Fintech startups are finding new ways to provide products and services that help these underserved people. Yet, startups lack the capital and strategic support they need to grow and scale their impact. Accion Venture Lab addresses this need," he added.
The Venture Lab portfolio focuses on the fintech space that offers the potential to reach underserved communities. Today, those include insurtech, agricultural finance, digital lending, holistic MSME finance solutions, and personal financial management.
“Ultimately, these companies support entrepreneurship, resilience in farming, gig economy and migrant workers, healthcare, transportation, and education,” the firm said in a statement.
In India, it has invested in eight startups including CreditMantri, Aye Finance, Artoo, CredRight, Varthana, Toffee, SMEcorner, and SmartCoin among others. Out of these, Accion has already made a successful exit from Aye Finance in December last year.
Venture Lab also partners with philanthropic organisations whose support enables it to provide specialised and extensive strategic and operational support to its portfolio companies and to invest at the higher-risk pre-seed stage in pursuit of its mission to reach the underserved.
(Edited by Megha Reddy)