US-based fintech investment firm Accion Venture Lab has launched a new $23 Mn fund to invest in fintech inclusion startups. In India, Venture Lab has invested into eight startups including Aye Finance, CreditMantri, CredRight, and SmartCoin among others.
Accion Venture Lab launched in 2012 with $10 Mn in capital. With this new fund, Venture Lab will now invest an additional $33 Mn –$10 Mn from its parent body Accion and $23 Mn from a coinvestment vehicle with third party funds, bringing its total capital under management to $43 Mn.
Investors in Accion Venture Lab fund includes 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.
Accion Venture Lab claims to have invested in 40 businesses operating in 30 markets. The firm typically invests $300K to $500K in seed-stage startups, with a follow-on option for companies. Its portfolio investments range across the fintech market including sectors such as 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 added.
According to Michael Schlein, President and CEO of Accion, 3 Bn 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.
“Fintech startups are finding new ways to provide products and services that help these underserved people. Yet often startups lack the capital and strategic support they need to grow and scale their impact. Accion Venture Lab addresses this need,” he added.
Accion Venture Lab In India
Accion Venture Lab’s India portfolio include MSME lending platform Aye Finance, smallholder agricultural financing company, Artoo; financial advisory startup, CreditMantri, collateral-free loans provider for MSMEs, CredRight; short-term personal loans provider SmartCoin, customised education loans company, Varthana; insurance tech startup Toffee; and online credit marketplace for SMEs, SMEcorner.
Of these, Accion has already made a successful exit from Aye Finance in December 2018. Venture Lab was one of the first institutional investors of Aye Finance in 2015 and had later also made a follow-on investment in the lending company.
Earlier last month, Aye Finance has raised $10 Mn in debt funding from responsAbility Investments AG, a Swiss impact investor. Interestingly in July, the company has also raised $7.7 Mn (INR 55 Cr) from DCB Bank through a securitisation deal.
In July, the company has claimed to have disbursed over INR 2K Cr to over 125K under-served and under-banked grassroots businesses. Its current asset under management is said to be INR 1200 Cr.