ZestMoney Backer Quona Capital Closes $332 Mn Fund To Invest In Fintechs Across India, SEA

Venture capital (VC) firm Quona Capital on Tuesday (November 8) announced the final close of its third fund at $332 Mn.

The fund exceeded its initial target of $250 Mn. It will be deployed to primarily invest in fintech startups in emerging markets such as India, Latin America and Southeast Asia, the VC firm said. 

The Fund III saw participation from existing investors, including global asset managers, insurance companies, investment and commercial banks. It also saw participation from as many as 20 new investors. 

“The rapid digitisation of these markets (Asian region) – combined with the innovative solutions developed by the companies Quona is investing in – are bringing these consumers and small businesses into mainstream economic and financial systems. Quona is proud to be a catalyst in enabling these entrepreneurs and their teams,” said Quona cofounder and managing partner Ganesh Rengaswamy.

Rengaswamy leads the firm’s investments in India and Southeast Asia.

This is the third investment fund unveiled by Quona Capital since its inception. With this $332 Mn fund, the VC firm’s aggregate committed capital stands at over $745 Mn.

Founded in 2015 by Rengaswamy, Monica Brand Engel and Jonathan Whittle, the Washington-based VC firm invests in growth-stage fintech startups in emerging markets. It is backed by international non-profit Accion, which is a sponsor, general partner and anchor investor in Quona. 

Quona claims to invest in companies that have the potential to provide outstanding financial returns and promote breakthrough innovation in financial inclusion for both consumers and small and medium enterprises (SMEs). 

The firm closed its first fund at $141 Mn in 2017, and followed it up with the closure of second fund at $203 Mn in 2020. 

“Our prior fund performance, robust pipeline of inclusive fintechs, and growing LP (limited partner) interest in our offerings are ringing endorsements of our view on the prospects of impact-oriented venture investing in emerging markets,” said Quona’s managing partner and cofounder Monica Brand Engel. 

The VC firm claims to have served 8.8 Mn SMEs and 30.2 Mn retail customers through its portfolio startups. In total, Quona’s startups have raised close to $4 Bn in capital and employ more than 23,000 people. Additionally, its portfolio companies have generated $836 Mn in revenue and enabled payment transactions in excess of $12.3 Bn.

In India, Quona has so far invested in consumer lending startup ZestMoney, Chennai-based fintech player CreditMantri, and wealth management platform Fisdom. It was also an investor in B2B ecommerce unicorn IndiaMART, but exited the platform after its listing in 2019. It has also invested in startups such as B2B-focused fraud protection platform Bureau, B2B buy now pay later platform Rupifi Technologies, among others.