Quona Capital closes $332 million fintech fund to invest in emerging markets

Quona Capital, the Washington DC-headquartered fintech-focused venture capital firm, on November 8 said it has closed a $332 million fund to continue investing in emerging markets including India, Latin America, Southeast Asia, Africa and the Middle East and North Africa (MENA) region.

This is the third fund from Quona Capital, and at the final close, it has exceeded the target of $250 million. The fund also brings the firm's aggregate committed capital to over $745 million.

In India, Quona Capital is invested in startups including wealth advisory and personal finance platform Fisdom, digital lending platform ZestMoney, B2B procurement platform IndiaMart, B2B lending platforms Rupifi and Neogrowth, and insurtech player Onsurity.

Speaking with Moneycontrol on the bright spots that Quona sees for further investments in India, Ganesh Rengaswamy, who leads the firm’s investments in India and Southeast Asia, said, "In India, we will see a significant structural shift in fintech infrastructure since a lot of solutions are relying on old-school infrastructure. Embedded and verticalised finance will also see an evolution, especially where there is convergence of mobility, climate-tech with fintech, as well as digital health and fintech."

The other area where Quona sees further opportunity is in insurtech, Rengaswamy added.

"We are seeing positive signals from the regulatory perspective as well," he said, referring to the Reserve Bank of India's (RBI) digital lending norms to regulate players in the space, which is being seen as a positive move offering clarity for investors, customers as well as startups.

Quona Capital was established as an independent venture capital firm in 2015 by co-founding managing partners Monica Brand Engel, Jonathan Whittle, and Rengaswamy.

“Since our earliest days, Quona has been dedicated to expanding the frontiers of financial inclusion—investing with conviction in markets and technology-enabled models improving access and quality of financial services for the masses,” said Engel, who leads Quona’s investments in Africa and MENA.

Quona’s Fund III investors include an array of global asset managers, insurance companies, investment and commercial banks, university endowments, foundations, family offices and development finance institutions. The majority of Fund III investors returned from prior Quona funds, joined by more than 20 new relationships, the firm said.

"Financial services in emerging markets are being transformed by the power of technology, and Quona’s portfolio companies have been at the front lines of that transformation," added Whittle, who leads Quona’s investments in Latin America.

"The pace of innovation in Latin America is accelerating due to a combination of regulatory reform, a maturing venture capital ecosystem, and a wave of founders who cut their teeth with the first generation of successful technology companies in the region," he said.