US Based Nonprofit Launches a $10 Million Fund For East Africa Startups
Social sector startup investor and Micro-Finance Accion has launched Venture Lab fousing on India and East Africa. Through a press release, the micro-finance has indicated that it targets to provide seed capital and management support to startups worldwide.
The Venture Lab looks to initially invest in startups in East Africa and India but there will be expansion to Latin America in the next few months.
Armed with an initial capital outlay of around Ksh 820 million ($10 million) it will invest between $100,000 and $300,000 in the following focus area
- Mobile financial services: Mobile phone-based financial services or business models built on branchless banking platforms, delivering services that include savings accounts, remittances, credit, and micro-insurance.
- Credit underwriting/delivery: Specialized credit assessment or delivery models to finance not only microenterprises, but also housing, education, small and medium enterprises, and energy initiatives.
- Internet and social media: Online or social media platforms for enabling financial access (e.g., peer-to-peer lending and social media-based financial services).
- Embedded financial services: Pay-as-you-go or lease-to-own energy products, modular housing and other ‘embedded’ financial-service models.
- New technology for bottom-of-the-pyramid finance: Taking advantage of new technology innovations (cloud computing, Internet access, handhelds/tablets) to improve the reach, cost, or quality of financial services to underserved customers, including customer relationship management, field force management, marketing/customer education, and analytics.
The statement reads:
Venture Lab will seek to support start-ups at a vital stage when they are normally considered ‘pre-investable’ – that is, when a product or service is ready to test the market but has not yet proved its ability to generate revenue.
The fund invested will either be in the form of convertible debt or equity according to the statement. The Lab looks to support around 20 startups in the next 3 years. The fund will be managed by a team based in India and Kenya but led by Paul Breloff of Accion’s Washington office.
Accion has been an active in India’s startup scene where it recently backed Michael & Susan Dell Foundation and Bangalore-based BPO Vindhya e-Infomedia while it also invested in firms like Swadhaar and Saija Finance.
In the release, Michael Schlein, Accion president and CEO is quoted as saying
“There is tremendous ferment and promise across the globe in efforts to deliver vital financial services to those who have traditionally lacked access. Venture Lab will seek out companies developing game-changing technologies and disruptive business models with the potential to transform the quality and the scale of financial services available to the world’s unbanked and under-banked.”
Accion is a global nonprofit dedicated to building a financially inclusive world, with access to economic opportunity for all, by giving people the financial tools they need to improve their lives.