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Tuesday, May 7, 2013

Seed-Stage Impact Investing Fosters Experimentation for Innovative Companies Serving the World’s Poor

Boston, MA/Washington, D.C., May 7, 2013 – Today, Accion announced the first five investments by Venture Lab, its $10 million seed capital initiative, which invests in start-up companies that help expand global financial inclusion. A pioneer and leader in bringing financial services to the underserved, Accion launched Venture Lab in April, 2012.

Venture Lab fuels innovation in financial inclusion by providing capital – typically in the range of US $100,000–$500,000, invested as either convertible debt or equity – and support to seed-stage enterprises. In fostering such experimentation, business models with the potential to benefit low-income people have the necessary support to experiment, validate new concepts, begin to expand operations and, eventually, to catalyze the next leaps in financial inclusion.

“Start-ups and new entrants are poised to drive innovation and reinvent the ways in which we reach the global underserved,” said Paul Breloff, Venture Lab’s managing director. “Each of our new investments offers the promise of transforming ‘business as usual’ and of expanding broader financial services for the base of the socioeconomic pyramid.”

Venture Lab’s investments focus primarily on the areas of mobile financial services, credit underwriting and delivery, internet and social media, embedded financial services, and new technology for bottom-of-the-pyramid finance.

Venture Lab’s first five investments are as follows:

• Coda Payments, headquartered in Singapore and currently operating in Indonesia, has built a transaction-processing platform that makes it easier for customers to buy goods and services using prepaid mobile accounts, giving those people who lack access to credit or debit cards a way to purchase digital goods, including e-content, job listings, information services and microinsurance policies.

• Demyst.Data, headquartered in Hong Kong and operating globally, offers a product that helps financial institutions tap into the explosive growth of online, social and internal “big data” to make better customer decisions, particularly for the purpose of credit assessment or to otherwise improve delivery of financial services to underserved customers.

• PayClip, headquartered in San Francisco and Mexico, is a payments company with a solution that enables a much broader range of merchants to accept credit, debit and other types of cards, using a smart phone plug-in and a sophisticated risk-management system to manage merchants and process transactions.

• Salud Facil, headquartered and operating in Mexico, offers low-income customers access to affordable credit to cover their healthcare and medical costs, addressing the need for quality and affordable care in a market in which few customers have access to traditional health insurance.

• Varthana, headquartered and operating in India, provides loans and support to affordable private schools in India, promoting access to and affordability of quality education for India’s poor and emerging middle class.

Venture Lab complements Accion’s Frontier Investments Group, which focuses on more established but similarly disruptive companies with demonstrated revenue traction. Both investment vehicles are part of Accion’s ongoing efforts to explore innovative business models that will radically improve the efficiency and enhance the quality of financial-service delivery to the under-banked.

About Accion 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. A world pioneer in microfinance, over the last 50 years, Accion has helped build 63 microfinance institutions in 32 countries on four continents. Those institutions are currently reaching millions of clients. The Accion U.S. Network is the largest microfinance network in the United States and, since inception, has served hundreds of thousands of clients with loans and support. For further information, visit www.accion.org.