Despite the current challenging landscape of decreased venture capital deals and layoffs in finance technology startups, Quona Capital has successfully closed its third fund with a total commitment of $332 million. The venture capital firm specializes in investing in emerging markets that accelerate financial inclusion, a trend that is gaining momentum.
A Growing Appetite for Fintech Investments
The success of Quona Capital’s Fund III can be attributed to the growing appetite for fintech investments, particularly in emerging markets. The firm has managed to exceed its initial target of $250 million and now has an aggregate committed capital of over $745 million.
Notable Exits from Previous Funds
Quona Capital’s previous funds have seen notable exits, including IndiaMart going public in 2019 and Coins.ph being acquired by Gojek the same year. These successes demonstrate the firm’s ability to identify promising fintech companies that can drive growth and impact.
Monica Brand Engel on Quona Capital’s Approach
Co-founding managing partner Monica Brand Engel attributed the success of Fund III to the firm’s digital thesis, which focuses on bringing technology to help affordability and connectivity. "We got very lucky in that the digital thesis about bringing technology to help affordability, also helps connectivity in a world where we’re more remote, where things are constructed, and we have been very successful," she said.
Investor Base and Focus Areas
Quona Capital’s investor base includes a majority of existing investors from sectors like global asset managers, insurance companies, investment and commercial banks, university endowments, foundations, family offices, and development finance institutions. The firm also welcomed 20 new investors during the fundraising process.
Addressing Concerns about Emerging Markets
During the fundraising process, Brand Engel noted that some of Quona Capital’s LPs expressed concerns about investing in emerging markets due to macro instabilities such as the Russia/Ukraine war and governmental instability. However, she emphasized that there is an attractiveness of emerging markets, particularly for basic goods and services that early adopters can adapt with technology.
Quona Capital’s Impact Investing Approach
Brand Engel highlighted the importance of financial inclusion in driving impact. "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 from startups that are ‘radically improving access and quality of financial services,’" she said.
Quona Capital’s Unique Value Proposition
The firm’s ability to identify promising fintech companies is attributed to its unique value proposition, which combines deep industry expertise with a network of local partners. "We have a network of local partners who are experts in the markets we invest in," Brand Engel explained.
Investment Focus Areas for Fund III
Quona Capital has identified several key focus areas for Fund III, including digital payments, lending, and insurance. The firm is committed to investing in companies that can drive growth and impact in emerging markets.
Conclusion
Quona Capital’s success with Fund III demonstrates the growing appetite for fintech investments in emerging markets. The firm’s ability to identify promising companies and its commitment to driving impact make it a leader in the fintech investment landscape.
