Quona Capital invests $332 million in startups focused on financial inclusion • TechCrunch

While financial technology startups are having a moment when it comes to fewer venture capital deals and layoffs, Quona Capitala venture capital firm investing in emerging markets that accelerate financial inclusion has found that there is still interest in fintechs.

The company had finalized $332 million in capital commitments for its Fund III, which invests in companies in Latin America, India, Southeast Asia, Africa and the Middle East. Notable exits from the first fund were IndiaMart, which went public in 2019, and Coins.ph, which was also acquired by Gojek in 2019.

The commitments for Fund III exceed the $250 million goal Quona initially aimed for and bring the company’s total committed capital to more than $745 million, co-founder Monica Brand Engel told TechCrunch. She started Quona Capital in 2015 with Jonathan Whittle and Ganesh Rengaswamy.

“We’ve been very fortunate that the digital thesis on bringing technology to help affordability also helps connectivity in a world where we’re more remote, where things are built, and we’ve been very successful,” she added. . “So even fundraising is proof of results and Fund III is a $332 million fund.”

Brand Engel, who leads Quona’s investments in Africa and the Middle East, said the fund’s investors are a majority of existing investors from industries such as global asset managers, insurance companies, investment and commercial banks, university endowments, foundations, family offices and development finance institutions. It also includes 20 new investors, the company said.

Speaking to the LPs during the fundraiser, she noted that one of their biggest concerns was investing in emerging markets: how risky it is and how it is affected by current events, for example the war between Russia and Ukraine and the instability of the government in the United Kingdom.

“People are realizing that you’re not immune to macro instabilities,” Brand Engel said. “However, there is an attractiveness of emerging markets and the pent-up demand for basic goods and services that early adopters can adapt with technology.”

She noted that the driving force behind starting the new fund is that financial inclusion is “a huge, powerful lever for impact” for a movement that started with Accion in microfinance and is now having a 2.0 moment with new innovative approaches to startups. that are “radical”. improving access to and quality of financial services”, for example embedded finance or connecting financial services with other business models, turning those services “to drive growth”.

One of the other areas she says Quona Capital’s premise “shines” is in being what the company calls “global local” with offices in more than 10 countries.

“Part of our value proposition is that we have people who are deeply embedded in the local market and speak a language, who were born there and have children there,” said Brand Engel.

Quona Capital funds have made more than 65 investments and will make 25 to 30 new and follow-on investments from the third fund. While the company has moved away from consumer finance a bit, it has gone all in on business-to-business, she added.

Some of the first six investments of the new funding have gone to companies including Egyptian financial super-app Khazna, MoHash, a decentralized financial protocol, Pillow, which aims to make saving and investing cryptocurrency easier, and nocnoc, which enables global merchants. connect to marketplaces in Latin America.

“We call ourselves an authentic impact investor focused on numbers, KPIs and building real business models so that they are profitable and impactful in a way that is a bit bottom-up,” Brand Engel added. “Also, the idea that we are operators and have started, scaled and exited financial services and technology companies gives us a very important perspective. Not only do we have empathy because we’ve been entrepreneurs ourselves, but I’m Latina and the daughter of immigrants, and we’re building something that really reflects reality.”

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