Accion Venture Lab, a seed-stage investment initiative of global nonprofit Accion, announced on Wednesday the launch of its new fund that is for inclusive fintech startups. The organization reported that it is adding $33 million to its initial capital pool, with the launch of the $23 million fund and an additional, separate $10 million investment from Accion.
“The new fund brings together a group of third-party impact and commercial investors that share Venture Lab’s commitment to innovative fintech startups that leverage technology toincrease the reach, quality, and affordability of financial services for the underserved at scale.”
Speaking about the fund, Michael Schlein, President and CEO of Accion, stated:
“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. 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.”
Accion Venture Lab also noted that inclusive fintech startups face the same significant entrepreneurial challenges as other startups, as well as additional challenges, including a highly competitive sector, constantly evolving regulations that vary across markets, challenges building the right team, and tight margins. Accion Venture Lab Managing Director, Tahira Dosani, further explained:
“We’re seeing substantial growth in the amount of investment capital available for fintech startups from what we saw when Accion Venture Lab launched in 2012, but money isn’t enough. Capital must be paired with strategic and operational support that is informed by a deep knowledge of the sector, target customer, and a deliberate focus on how new technologies can help the underserved build better lives. We can accelerate the growth trajectories of companies through our capital plus approach to investing.”
Accion Venture Lab Managing Director, Vikas Raj, added:
“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.”
