Financial Inclusion: The role of technology incubators 17 March 2015

Financial Inclusion

Digital Financial Inclusion

Disruptive Solutions Scalable High growth High impact Payments & Transactions Credit Savings Insurance Angel Investment Impact Investment Venture Capital

High Impact FI Business Models M-Pesa - mobile-phone based money transfer and microfinance - used by 17 million Kenyans. M-Shwari – consumer savings & loans through M-Pesa by Commercial Bank Africa – 1 million new loans within 41 days of launch, pushing Kenya’s bankable population with a bank account 67 per cent. bKash in Bangladesh, mobile financial services reaching a quarter of the country’s adult population (160 million) in first two years. Zoona, a Zambian mobile technology company providing money transfers, electronic voucher payments, and agent payments. BIMA connects mobile operators and insurance companies to provide insurance products via mobile phone across 11 countries in Africa, Asia, and Latin America.

Financial Inclusion Incubators VerticalTech Geographic Social Impact FI Incubators / Accelerators: Barclays Techstars Accelerator 2014, London Startup bootcamp Fintech 2014, London Fintech Innovation Lab – Accenture, London, New York, Dublin, Asia Pacific Village Capital - Accion Venture Lab: FinTech Mexico 2015 Village Capital - Ebay Foundation Mexico: FinTech 2014

Financial and Social return Tech Incubators Social Impact Incubators

The role of the Incubator/Accelerator Application SEED Investment Programme Growth Capital Alumni networks Coaching, workshops, mentorship, training, networking and access to professional services. Highly competitive signalling effect - e.g. Y Combinator accepts 2% of total applicants. Investors, suppliers, distributors, partners through networks and structured events An investment of £10,000-£30,000 for a 5% - 10% equity stake. Pitch events, transaction support and post-investment on-boarding

Incubator approaches applied to digital financial inclusion business models Digital Financial Inclusion Digital Transaction Platform Retail Agents Consumer Access Device Strategy Business Innovation Product Digital Brand Communication Ideation Platform Growth

The future of Incubators in Emerging Markets Y Combinator, California Techstars, California Dream ITVenture, California 500 Startups, California Y Combinator, California Techstars, California Dream ITVenture, California 500 Startups, California MEST Incubator, Ghana AppLab Incubator, Kenya 88mph, South Africa, Kenya and Nigeria The Growth Hub, Grow Africa MEST Incubator, Ghana AppLab Incubator, Kenya 88mph, South Africa, Kenya and Nigeria The Growth Hub, Grow Africa Refining FI specific accelerator models and incubator services, growing investor networks, providing equity stakes. Targeting high growth FinTech start-ups in emerging markets in Africa, Asia and South America Virtualization enabling Accelerators / Incubators to provide services, such as mentoring and pitching, virtually. Accelerators targeting later stage companies (Seed, Series A). Vertical Incubators focusing on Financial Inclusion, and Accelerators targeting specific Financial Inclusion barriers.

Are impact incubators & accelerators creating value? Value for Business and Investors % companies receiving investment through an introduction from incubator/accelerator - 40% for Early Stage vs. 5% for Growth Stage Revenue growth in 2 years following program participation - 86% for Early Stage vs. 14% for Growth Stage 50% of early stage investors sourced at least 1 investment from an incubator/accelerator, only 12.5% of growth stage investors Incubated Businesses Observations Early Stage businesses found value in business strategy, planning, training & investment preparation Growth Stage businesses disappointed in lack of investment sourcing, process preparation and readiness Measuring Value Created by Impact Incubators & Accelerators, ANDE and I-Dev (November 2014)

SPRING ACCELERATOR A pioneering issue-based accelerator that provides finance, world-class mentors, and technical expertise to businesses that can improve the lives of adolescent girls SPRING works with businesses that offer products or services that can help - Generate income Save time or labour Help girls save or invest Help girls feel safe

Selection Camp 1 Day 50 Finalists pitch to business advisors and investors 18 selected for the SPRING Accelerator Boot Camp 2 Weeks Refining and stress-testing business models through intensive sessions with advisors, mentors, coaches and peers. Prototyping 8 Weeks Experimentation with the plans developed at Boot Camp including research, product design, business operations and strategy. Pitch Camp 1 Day Entrepreneurs head back to their capital cities to present revised pitches to external investors to secure a larger pool of capital. Customised consulting support Entrepreneurs implement prototypes into their existing businesses. SPRING investment team help apply capital strategy plans developed at the Boot Camp. SPRING Forum Entrepreneurs pitch investment- ready businesses to global investor partners. SPRING enterprises graduate with robust networks of investors and strategic partners.