Accion closes $61.6 million second fund to invest in early-stage fintech startups

Washington, D.C.-based impact investor Accion has closed its second early-stage fund (Accion Venture Lab Fund II) at $61.6 million, aimed at backing fintech startups that expand financial inclusion in emerging markets. 

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The vehicle is part of Accion Venture Lab, now rebranded as Accion Ventures, which has been investing in this segment since 2012.

The fund closed with commitments from both existing and new investors, including commercial and impact asset managers, development finance institutions, foundations, family offices, and strategic financial service companies. Limited Partners in the fund include the Dutch entrepreneurial development bank FMO, Proparco, ImpactAssets, Ford Foundation, MetLife, and Mastercard. The most recent initial investments by the new fund are PaidHR in Nigeria, Foyer in the United States, FinFra in Indonesia, and Flowcart in Kenya.

Accion plans to deploy the new fund across as many as 30 companies worldwide, with a particular focus on India. About 30% of the capital has been earmarked for Indian startups, according to managing partner Rahil Rangwala, who said the firm sees significant opportunities tied to the country’s fast-evolving digital public infrastructure.

The investor’s earlier Indian portfolio includes Aye Finance, an MSME lender now preparing for a public listing; Olyv (formerly SmartCoin), a consumer lending platform; and Transbnk, a fintech infrastructure startup that raised $25 million in August with Accion’s participation.

Accion typically invests $500,000 to $1 million as a first institutional backer, but it also participates in follow-on rounds. Rangwala said the new fund will target areas such as B2B marketplaces, vertical software providers, and fintech infrastructure firms that can power larger financial services institutions.

Since its inception, Accion’s venture arm has deployed over $59 million across 76 startups in more than 30 countries, with 13 exits to date, including from Aye Finance. The fund has expanded into Africa, Latin America, Southeast Asia, and the United States, seeking both financial returns and measurable social impact.

Michael Schlein, President and CEO of Accion said: "With the huge uptick in mobile technologies in emerging economies, we see a significant opportunity to connect many small businesses and low-income consumers to the digital economy for the first time. Leveraging third-party capital to deliver social and financial objectives is a critical part of our strategy. This fund seeks to support the growth of early-stage, disruptive companies providing high-quality, affordable financial services that can help reduce poverty and create opportunity for millions of people globally."

Amee Parbhoo, Managing Partner, Accion Ventures, said, "With this new funding, we seek to build on our success to date, finding and scaling some of the world's most innovative fintech companies that provide a full suite of financial products and services to small businesses globally.

"We believe our global portfolio and local approach mean we can spot and respond to trends faster, driving local innovations on a global scale, and share learnings across geographies. We aim to be one of the first institutional checks a company receives and will continue to engage early, while maintaining sufficient reserves to back our winners as they scale," Parbhoo added.