MICROCAPITAL BRIEF: Accion Launches $10m Venture Lab to Invest in Microfinance Institutions, Other Financial Inclusion Start-Ups

Accion, a US-based nonprofit microfinance organization, recently announced that it has launched Venture Lab, a USD 10 million investment vehicle that will provide seed capital to financial inclusion start-ups across the world. Venture Lab will focus on companies in the pilot and first-revenue stages that have developed products that are ready to test the market but have not yet proven their ability to be financially stable. The fund plans to invest between USD 100,000 and USD 500,000 in each company as either convertible debt or equity. Venture Lab will also provide technical assistance with “path-to-scale” strategy, analytics, financial modeling and business development.

The entity will aim to invest in approximately 20 companies over three years and will focus on the following: (1) mobile financial services or business models built on branchless banking; (2) credit assessment or delivery models that finance microenterprises as well as housing, education, energy initiatives and small and medium-sized enterprises; (3) internet and social media platforms; (4) embedded financial services such as pay-as-you-go and lease-to-own products; and (5) the use of technology to improve the reach, pricing and quality of financial services.

Initial research by Venture Lab has focused on East African and South Asian companies, and the fund plans to turn its focus to Latin America in the next few months.

By Charlotte Newman, Research Associate

About Venture Lab
Venture Lab is a USD 10 million investment vehicle that was launched in April 2012 by US-based nonprofit Accion. It provides capital and management support to start-up financial inclusion companies. The initiative focuses on companies in five sectors: (1) mobile financial services or business models built on branchless banking; (2) credit assessment or delivery models that finance microenterprises as well as housing, education, energy initiatives and small and medium-sized enterprises; (3) internet and social media platforms; (4) embedded financial services such as pay-as-you-go and lease-to-own products; and (5) the use of technology to improve the reach, pricing and quality of financial services. Investments of between USD 100,000 and USD 500,000 per company are made in the form of convertible debt or equity.

About Accion
Accion is a private, US-based nonprofit organization with the mission of alleviating poverty by providing financial products such as microenterprise loans and business training. Accion was founded in 1961 and issued its first microloan in 1973 in Brazil. Accion’s partner microfinance institutions provide loans to men and women entrepreneurs in 22 countries in Latin America, Asia, Africa and the United States. As of 2010, Accion’s network serves 3.18 million active clients and has an active loan portfolio of USD 3.81 billion.

Sources and Additional Resources:

Information sent to MicroCapital from Accion International: “Accion Launches Venture Lab, a Seed-Stage Investment Initiative for Financial Inclusion Start-Ups.”

MicroCapital.org story, March 1, 2012, “MICROCAPITAL BRIEF: Mobile Transactions International of Zambia Receives $3.2m Equity Investment from Omidyar Network, ACCION,” http://www.microcapital.org/microcapital-brief-mobile-transactions-international-of-zambia-receives-3-2m-equity-investment-from-omidyar-network-accion/

MicroCapital Universe Profile: Venture Lab
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Venture+Lab

MicroCapital Universe Profile: Accion International
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=ACCION+International

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