Accion Venture Lab invests in companies with new products or business models that expand financial services to underserved populations. Parbhoo explains that they look for opportunities in Latin America and the Caribbean, the Middle East and North Africa, sub-Saharan Africa, Southeast Asia and the United States.
The fund focuses on five key areas: SME finance, consumer financial health, challenger banking, payments and insurance technology. They also invest in the intersection of fintech with other sectors, such as integrated finance models and agri-tech startups.
To select startups, Accion Venture Lab looks for post-research and development companies, with a full-time team and, ideally, a pilot or prototype in the market. They evaluate team caliber, traction, product roadmap and market size.
Beyond capital, Accion Venture Lab offers strategic and operational support. Their team has completed over 100 projects in areas such as business model, customer insights, product and pricing, operations and human capital.
To measure social impact, they create an individual impact thesis for each company, with operational metrics monitored quarterly. They seek a balance between financial returns and their social mission, targeting market returns on their investments.
Parbhoo stresses the importance of profitable growth in emerging markets, focusing on unit economics and long-term value for clients.
In terms of specific challenges, in Mexico they mention the need for a more complete public digital infrastructure and high credit costs and fraud levels.
Accion Venture Lab has a typical investment horizon of 10 years and seeks opportunistic exits through IPOs, acquisitions or secondary sales. They encourage collaboration among their portfolio companies through biennial forums and webinars.
The fund also supports diversity and inclusion by adhering to the 2X challenge and actively tracking diversity in their portfolio companies.
In terms of emerging technologies, Accion Venture Lab is showing interest in the potential of Web3 for financial inclusion, having joined the Zeal for Prosperity Alliance.
Parbhoo notes that a crucial career decision was working in India with SKS Microfinance, which gave him a unique perspective on building businesses from scratch in emerging markets.
Finally, Accion Venture Lab is exploring the role of fintech in addressing climate-related financial challenges by supporting innovations that build resilience and help vulnerable communities adapt to climate shocks.
Add a comment
