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Accion, a US-headquartered non-profit organisation that invests in ventures in the financial inclusion and financial technology space, continues to be bullish on opportunities in India.
“At any point of time we are literally looking at 10 opportunities. We are not going to do all. We are looking at two concrete possibilities — one a fintech payments company and the other a small financial institution,” says Esteban Altschul, Chief Operating Officer, Accion.
He says the opportunities are many, but the challenge for Accion is to find the right ventures — those that combine financial inclusion with impact. It also looks for opportunities that can be replicated in other markets.
In the last six months, Accion invested — on its own or with other investors — in five start-ups in the financial inclusion and fintech space: ₹35 crore in BASIX Sub-K, Hyderabad, a financial inclusion company; ₹25 crore in a Series B round for Fisdom, Bengaluru, which helps investors manage their mutual fund investments; ₹9 crore in CredRight, a Hyderabad-based venture that provides access to micro, small and medium enterprises leveraging chit funds; $2 million in a pre-Series A round in Bengaluru-based SmartCoin, which provides small- to mid-size loans to mobile users; and $1.5 million as seed funding in Delhi-based Toffee Insurance, a digital-only insurance platform for millennials.
Also, in June, Accion sold its balance 35.94 per cent stake in Swadhaar Finserve to RBL Bank. Accion was one of the early investors in Swadhaar.
“Our role of taking the company to a level of sustainability, profitability and impact was done and it was time to move on,” Altschul told BusinessLine recently. “In rupee terms, it was a good exit,” he added.
Financial inclusion
He said India remained the epicentre of financial inclusion. The revolution of digitalising the country was important.
Aadhaar was an important tool in catapulting financial inclusion and lowering costs, bringing in efficiencies, saving time for clients and providing more opportunities for companies, he said.
“India continues to lead in the innovation space and also in regulatory and institutional framework. Other countries are watching India closely,” he said.
Buzzing fintech space
A number of ventures in financial inclusion and fintech from Colombia and Peru have visited India to see fintech ventures.
They are coming here, said Altschul, just to see the various innovations happening.
“You come to India, in one week you can visit 15 companies and see more than you can see in 3-5 countries. They are coming to learn two things: the what and the how,” he said.
On the what, it was about what was new, what was happening here that was not happening elsewhere. On the how, it was about how entrepreneurs here went about starting a venture, funding, staffing and the like.
Higher valuations
Accion invests through three vehicles, starting from the seed level and going to Series A or B stages. Altschul feels that valuations in India are high compared with the rest of the world.
“I cannot think of any single country that has an average higher valuation than India. Some of it is justified because of the proven and anticipated growth,” he said.
The valuations in India were 3.5-4 times the book, whereas it was 2.5-2.8 times in Latin American countries.
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