Emerging markets focused fintech impact investor Quona Capital which has been making investments in Indian companies from its Fund II worth $142 million is now on road to raise its Fund III.
“We want to raise a larger fund to write bigger cheques. The next fund is targeted at $150 to 200 million,” said Ganesh Rengaswamy, Founding Partner at Quona Capital.
The next fund will be focused on investment deals at series A and Series B levels and ticket sizes for investments will range from $3 to 5 million going up to $10 to 15 million over the life of the company.
While fintech remains the broader theme for Quona going forward, the company plans to broad base its investment portfolio across sectors that can leverage fintech to deliver everyday needs in areas such as education, healthcare and insurance and small business.
“We are seeing phenomenal conversion between areas such as payments, digital commerce, and lending. That is a space where we will do more and more deals,” said Rengaswamy. Quona Capital is targeting to raise 50 to 60% of the fund by June this year and has already received hard and soft commitments close to the first close corpus. “Most of our existing investors are wanting to come back and double down on their investments in Quona,” said Rengaswamy at Quona which has LPs including JP Morgan, Partners Group, MasterCard, and MetLife.
Accion, a global non-profit focussed on fintech is one of the anchor investors in the fund and will remain an anchor investor in the Quona’s next fund as well.
“It is quite likely that we will add new investors to the fund. Our intent is to bring in new investors from the markets we invest in and India is high on that list, besides getting on board investors from the Middle East and other parts of Asia.
Mid-last year Quona Capital had announced allocating 30% of the fund corpus from the current fintech focused fund for Indian investments, making India its largest target market among other rapidly growing markets such as South Africa, East Africa, Brazil, Mexico and SouthEast Asia.
From the current fund, the company has made a total of 13 investments so far including companies such as NeoGrowth, IndiaMart, CreditMantri, and Fisdom. The existing fund will do two to three fresh deals besides follow-on deals in companies that have performed well.
Recently the fund along with other investors participated in an Rs. 300 crore follow-on deal investment in digital lender NeoGrowth. The deal was led by Asia and Africa focussed impact investment fund LeapFrog Investments.