The Catalyst Fund has earned $ 15 million in new support from JP Morgan and UK Aid and will support 30 new fintech companies in Africa, Asia and Latin America in the next three years.
The Boston-based accelerator provides capital-free mentoring and financing to early stage technology companies focused on driving financial inclusion in emerging and border markets.
That means connecting people who may not have access to basic financial services, such as a bank account, credit or loan options, to those products.
Catalyst Fund will choose an annual cohort of 10 fintech startups in five designated countries: Kenya, Nigeria, South Africa, India and Mexico. Those selected will obtain grant funds and go through a six-month accelerator program. The details of that and how to apply are found here.
"We are offering grants of up to $ 100,000 to early-stage companies, in addition to support for the creation of companies … and really … putting these companies on the road to the product market," the director of Newsdio told Catalyst Fund, Maelis Carraro.
Program participants get exposure to the fund's investor networks and the investor advisory committee, which includes Action and 500 Startups. With the $ 15 million Catalyst Fund, it will also make some additions to its network of global partners that support the accelerator program. The names will be announced, but Carraro was able to reveal that the Yes Bank of India and the University of Cambridge are among them.
The Catalyst fund has already accelerated 25 startups through its program. Companies, such as the African payments company ChipperCash and SokoWatch, an East African B2B e-commerce startup for informal retailers, have increased their seven-figure rounds and expanded into new markets.
Those are types of commercial movements that Catalyst Fund intends to stimulate with its program. The accelerator was founded in 2016, backed by JP Morgan and the Bill and Melinda Gates Foundation.
Catalyst Fund now has the support and administration of Rockefeller Philanthropy Advisors and the global technology consulting firm BFA.
African fintech startups have dominated the accelerator startups, which comprise 56% of the portfolio in 2019.
That trend continued with the latest Catalyst Fund cohort, where five of six fintech companies: Pesakit Kwara Cowrywise Meerkat Y Spoon – They are African and one, the agtech credit startup Farmart, operates in India.
The appeal for Africa is because the continent demonstrates the greater need for the Catalyst Fund's financial inclusion mission.
According to various estimates, Africa is home to most of the world's unbanked population and has a considerable number of unbanked consumers and SMEs.
According to World Bank data, approximately 66% of the one billion people in sub-Saharan Africa do not have a bank account.
Together, these numbers have led to the fact that most of the venture capital funds in Africa go to thousands of new Fintech companies trying to scale up financial solutions in the continent.
Digital finance in Africa has also caught the attention of notable external names. Twitter / Square CEO Jack Dorsey He was recently interested in the cryptocurrency potential of Africa and the Wall Street giant Goldman Sachs has invested in new companies related to financial technology in the continent.
This lends itself to the question of JP Morgan's interests in relation to the Catalyst Fund and the financial sector in Africa.
For now, JP Morgan has no plans to invest directly in African startups and is having a long-term vision in supporting the accelerator, according to Colleen Briggs, director of community innovation at JP Morgan
"We believe that financial health and financial inclusion is … a cornerstone for inclusive growth … For us, if you care about a stable economy, you should start with financial inclusion," said Briggs, who also oversees the Fund. Catalyst
This take is aligned with the JP Morgan announcement in 2019 of a five-year global philanthropic commitment for $ 125 million to improve financial health in the United States and around the world.
More recently, JP Morgan Chase published some of the best financial results on Wall Street, with fourth-quarter earnings of $ 2.9 billion. It will be worth following if the company changes any of its revenue-generating skills to business financing and entrepreneurship activities in Catalyst Fund markets such as Nigeria, India and Mexico.