When we started Accion Venture Lab over a decade ago, we sought to address the gaps inherent in successfully scaling fintech startups designed to serve financially excluded populations. We quickly discovered that it was not just a capital gap that needed to be filled; fintech founders also craved strategic and operational insights to help them scale and succeed.
This observation was the genesis of Accion Venture Lab’s portfolio engagement team, and ten years later, we’re celebrating a huge milestone: we’ve now conducted over 100 strategic projects with our portfolio companies.
We designed our portfolio engagement function to not only serve early-stage fintech founders’ need for capital to grow, but also support their growth with focused, strategic guidance – refined from our team’s work as international investors and previous operators at multiple tech companies, and targeted toward critical areas of an early-stage fintech’s pathway toward sustained success. We didn’t just want this to be another “value-add” function that venture funds offer. Rather, we built it to be intentionally hands-on and engaging with our founders, anchored by multi-week, in-market strategic engagements with our portfolio founders.
While reflecting on this milestone, we wanted to provide a few lessons learned from building this approach, and how we’ve adapted our approach over the years to benefit our founders and the broader inclusive fintech ecosystem.
Build with investment outcomes as the north star.
There is often an impetus to create a separation layer between investment and portfolio support teams within a venture fund. We took a different approach and incorporated our portfolio engagement function into all aspects of the investment and portfolio management process, from initial screening to exit, because we believed in the importance of developing strategic engagements that founders could quickly learn from and execute. Our “north star” centers on a very straightforward goal: help our founders successfully and quickly raise their next round of capital after we invest, and support our investment team’s continued guidance of the company’s growth and success.
As a result, we deliberately built a set of capabilities that complement our investment team. We dive into five core fintech strategy and operational topics with a global lens, which our investment team supplements with deeper knowledge in our core markets, connections to regional investors, and sound governance. We built capabilities around topics like fintech product development, building an ESOP pool in frontier markets, and designing and refining a credit policy, which our investment team can adapt to suit the regional intricacies that influence those topics (such as regulatory issues, local market trends, and regional investor sentiments on business models).
We focus on these areas because we believe they are the most crucial for early-stage fintechs to get right to ensure future success. Furthermore, we embed a “look forward” into our work by researching specific metrics for success in each model we invest in, such as B2B marketplaces, and ensuring that our project outcomes are aligned with them.
An example of how this approach succeeds is in our recent work with a supply chain financing company we invested in in 2022. During diligence, we noted that the team’s go-to-market approach with a key enterprise client in their discounting marketplace was not fully developed. During our weeklong engagement with the team in India, we conducted a series of workshops on how to structure their enterprise sales strategy, SaaS product pricing, and team structure. With our recommendations in hand, the company successfully restructured their approach to effectively market their product to this persona, which was an important narrative in framing their Series A fundraise with a strategic financier as an anchor investor.
Adapt your approach to suit the times.
Our post-investment approach has changed over time to accommodate our evolution as investors, our founder’s changing needs, and our goal to maximize impact. We initially aimed to engage on strategic areas of need with our new portfolio companies in the first three months post-investment; however, we discovered that, in some cases, a founding team is still creating the structure needed to execute successfully on a strategic goal. We adapted our approach to give founders space to take a beat after an intense fundraising cycle, regroup, and engage when they have capacity. A recent addition to our portfolio, which entered the market with a software platform catering to their industry vertical, did not start exploring financial services offerings until later in their journey. We gave their team space to start building this function before helping to supercharge it, and our in-market work with the team combined customer research and team discussions to identify the near-term financial products roadmap to execute on.
We intentionally haven’t changed our approach to specialization — if anything, we have enhanced it. We ensure our support to founders is oriented around our role as fintech investors, and we’ve honed our work specifically on how to create powerful, inclusive financial solutions that scale. Our existing resource base is further bolstered by recent work focused on embedded finance product development and piloting, building an internal embedded fintech organization, and deep dives into core metrics that are markers for success regardless of the models we invest in.
We believe that founders shape the culture, but must entrust their team to carry it forward as early as possible.
In the midst of growing and scaling their companies, what we often hear from founders is the challenge of building and maintaining a team that can execute on their core strategy. Because of the need to balance technology with human touch for many of the customers our portfolio companies serve, teams must be scaled quickly across multiple geographies, which often results in fragmented leadership structures and hierarchies. This challenge usually reveals itself too late in Board discussions and reporting.
We work closely with our founders, to assess their employees’ sentiment on job satisfaction, growth opportunities, and alignment with the company’s vision. We’ve discovered that the most successful founders learn to empower their local team leaders to cultivate trusted relationships with on-ground staff. Moreover, a founder’s ability to clearly outline the company’s vision is most effective when local teams are empowered.
We believe that founders learn best from other founders.
As our portfolio has grown, we’ve discovered where our knowledge ends. As investors, we only get brief glimpses into our founders’ approaches to building companies, and we merely aim to serve as guides in support of their efforts.
Our founders, unsurprisingly, are eager to share their knowledge with other impact-focused entrepreneurs, so we host biennial forums to bring together our portfolio CEOs to share their perspectives in a closed-door, candid fashion. As the COVID-19 pandemic struck, and we resorted to hosting a series of facilitated webinars, we discovered that founders also value similar, intimate virtual discussions on a more frequent basis. We’re now dedicated to creating more opportunities for our founders to learn from one another, enabling us to gain a deeper understanding of how to build and scale an inclusive fintech.
To catalyze impact, help others build.
Since we started over a decade ago, we’re proud to have played a part in our portfolio companies serving over 50 million consumers and 10 million SMEs with accessible, affordable financial services. But we are not alone in this journey, and that’s why we’ve emphasized the importance of disseminating our lessons learned to a variety of audiences. We noted above how we continue to publish resources related to strategic growth for our portfolio, and we design these resources to be utilized by any fintechs – not just our own. We are proud to contribute to a growing ecosystem of impact-focused fintech investors seeking to support their own portfolios.
We also continue to build engaging ways for participants in the inclusive fintech ecosystem to share ideas and support one another. To date, we have hosted four versions of our biennial Fintech for Inclusion Summit, which convenes leading practitioners, investors, and builders in the space to work together in creating a more accessible economy for all. Additionally, we’ve published six seasons of our podcast, Fintech for the People, where we give leaders in the inclusive fintech world an opportunity to share their own stories.
While we’re taking a moment to celebrate this milestone, our work is not finished. New, emerging challenges in financial inclusion continue to grip our world, and we aim to continue to provide both capital and leadership to help address them. To our founders, limited partners, grant partners, and co-investors: thank you for partnering with us.
