Global fintech investor Accion Ventures has announced the final close of a new $61.6m fund to African back early-stage companies building financial solutions for the underserved.
The new fund, Accion Venture Lab Fund II, LP, has already made initial investments in several startups, including Nigerian payroll and HR management company PaidHR and Kenyan B2B e-commerce platform Flowcart, signalling a strong focus on the African continent.
The firm’s strategy is to identify and support startups that are addressing a significant global market failure. It points to a $5.7tn annual financing gap for micro, small, and medium-sized businesses (MSMEs) and the 1.6bn people worldwide who lack access to formal financial accounts as a major opportunity for disruption.
“With the huge uptick in mobile technologies in emerging economies, we see a significant opportunity to connect many small businesses and low-income consumers to the digital economy for the first time,” said Michael Schlein, President and CEO of Accion.
A Track Record in Africa
The new fund builds on a decade of investment activity. Since 2012, the firm has deployed $59.4m into 76 companies across more than 30 countries. Its recent successful exits from the African market highlight its focus on the region:
- Apollo Agriculture: A Kenyan company providing smallholder farmers with financing, insurance, and training.
- Lula: A South African digital bank focused on providing accounts and lending to small businesses.
- Pula: An agricultural insurtech company that offers solutions to smallholder farmers across Africa and Asia.
Accion Ventures provides more than just capital. It offers hands-on support in areas like board governance and operational guidance, and helps startups access its network to secure further debt and equity funding.
“We aim to be one of the first institutional checks a company receives and will continue to engage early, while maintaining sufficient reserves to back our winners as they scale,” said Amee Parbhoo, Managing Partner at Accion Ventures.
The Investors and Strategy
The fund secured commitments from a mix of commercial and impact investors, including development finance institutions, foundations, and strategic corporations. Limited Partners include the Dutch development bank FMO, France’s Proparco, Ford Foundation, MetLife, and Mastercard.
Accion Ventures will look for companies using innovative technology like embedded finance and alternative data to deliver financial services.
“We are excited to support the growth of incredible innovators… who are using technologies ranging from satellite imagery to conversational commerce,” said Rahil Rangwala, Managing Partner at Accion Ventures. “We believe our global portfolio and local approach mean we can spot and respond to trends faster, driving local innovations on a global scale.”