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Accion Raises $23 Million For Fintech Startup Fund

Accion Raises $23 Million For Fintech Startup Fund - Featured Illustration

Global nonprofit Accion has quadrupled the capital for inclusive fintech startups that it supports through Accion Venture Lab, the seed-stage investment initiative it launched in 2012.

The inclusive fund has raised $23 million in contributions from such participants as the Ford Foundation, Visa, and Proparco, bringing Accion Venture Lab’s total capital to $42 million. Accion says the fund will be used to “increase the reach, quality, and affordability of financial services for the under-served at scale,” regardless of geography and without regional investment quotas. However, roughly 25-30% of funds will be allocated to African ventures, according to the lab’s managing director, Tahira Dosani.

“We want to continue to focus on Latin America, sub-Saharan Africa, and Southeast Asia, as well as in the US. It really is about where we see the need and opportunity across the markets that we’re in,” she said. “Our goal is to really be the first institutional investor in the companies we invest in. That’s where we see the biggest capital gap. And it’s where we build capability and expertise.”

Accion Venture Lab’s portfolio includes 36 fintech startup investments across five continents. The fund will continue its practice of making investments in the $500,000 range. The first company to receive seed financing is Joust, an American fintech platform for gig economy workers.

Dosani identified Accion’s geographic reach and experience as the biggest appeal to contributors to the new fund.

“We think that’s our strength, because we’re able to invest in similar business models across different markets. And we’re able to bring that knowledge from one market to another,” she said.

Accion’s Venture Lab results speak for themselves, as many of the companies the Lab has funded have achieved real success. For every dollar Accion Venture Lab has invested, its portfolio companies have raised an average of $13 more in equity capital from later-stage investors.

“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,” Dosani said. “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.”

The sentiment was echoed by Accion CEO Michael Schlein: “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.”


About author
G. Dautovic

I have always thought of myself as a writer, but I began my career as a data operator with a large fintech firm. This position proved invaluable for learning how banks and other financial institutions operate. Daily correspondence with banking experts gave me insight into the systems and policies that power the economy. When I got the chance to translate my experience into words, I gladly joined the smart, enthusiastic Fortunly team.

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