Accion Launches $10M Venture Lab


[Techtaffy Newsdesk]

Microfinance company Accion is launching Venture Lab, an initiative that provides seed capital and management support to financial inclusion start-ups worldwide. The $10 million program will seek out companies that have completed research and development and are at the pilot/first-revenue stage.  Investments will typically be in the range of $100,000-$300,000, invested either as convertible debt or equity.

Seeking approximately 20 investments over the next three years, Venture Lab will focus primarily in the following areas:

  1. 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.
  2. 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.
  3. 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).
  4. Embedded financial services: Pay-as-you-go or lease-to-own energy products, modular housing and other ’embedded’ financial-service models.
  5. 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.

Geographically, Venture Lab’s mandate is global. Preliminary research has focused largely on companies in East Africa and South Asia. In the coming months, Latin America will also be a focal point.

Venture Lab will seek to support start-ups 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 Lab says it will provide not only patient capital, but also a dedicated team ready to assist with early-stage tasks such as analytics, financial modeling, business development and reaching scale.

The Lab will be directed by Paul Breloff out of Accion’s Washington, D.C. offices, with staff to be based in East Africa and India.

[Image Courtesy: Accion]


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