A D.C. nonprofit focused on impact investment has raised more than $152 million to back financial institutions based in developing countries.
Accion International has established the Accion Digital Transformation Fund, or ADTx for short, with backing from the likes of Mastercard Inc. and International Finance Corp., the investment arm of the World Bank.
Njord Andrewes, one of two managing partners for ADTx, told me these funds will be deployed in up to a dozen firms that are working to help small businesses get access to the world's financial systems. The fund will primarily focus on investing in startups that are based in South and Southeast Asia, Latin America and Africa, and will be managed by a subsidiary, Accion Impact Management.
Andrewes, who is based in D.C., said the fund is the nonprofit's largest to date. Its closing comes a few months after Accion Venture Lab Fund II LP, a separate investment vehicle from Accion International, netted $41.25 million to invest in fintechs.
"There are two billion people who are underserved and in the emerging markets with regards to financial services, and we're really trying to help reach that population group," Andrewes said.
The newest fund has already backed two firms: Bhubaneswar, India-based Annapurna Finance and Telangana, India-based IKF Finance. Andrewes said that while ADTx will only be able to invest about $10 million per company, Accion is encouraging its partners in the fund to make direct investments as well, potentially bringing some of these companies' funding to $50 million.
Andrewes said it took Accion about two years to close the fund, partly due to a challenging fundraising climate but also because a number of its backers are government-owned development banks. They include: U.K.-based development finance institution British International Investment; Dutch entrepreneurial development bank FMO; OeEB, the Development Bank of Austria, and Swedfund, Sweden’s development finance institution
"We are working with development finance institutions so there is a sort of a slower process to get approval and to make it happen," he said.
Andrewes expects Accion to deploy half of the $152 million this year.
