This raises the emerging markets-focused VC firm’s aggregate committed capital since inception to over $745 million.
The company has backed startups such as buy-now-pay-later platform ZestMoney, online investment platform Fisdom and ecommerce marketplace Ula, among others.
Quona invests in companies that expand access to financial services for underserved consumers and businesses in Latin America, India, Southeast Asia, and the Middle East and North Africa.
Fund III’s investors include leading global asset managers like Goldman Sachs, sovereign wealth funds such as Temasek, insurance companies, investment and commercial banks, university endowments, foundations, family offices, and development finance institutions.
The fund will look to invest in fintech and fintech adjacencies across verticals like supply chain, healthcare, education, digital commerce and mobility, Ganesh Rengaswamy, cofounder and managing partner at Quona, told ET.
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He said early-stage investments – seed to Series A – will be especially pronounced in the third fund compared to its previous two funds.
“We are the only global fund in emerging markets for fintech which has a one-team-one-strategy approach. Obviously, we have nuances in how we approach our markets, but we are in four continents. India is where we have maximum investments, followed by Indonesia and Brazil,” Rengaswamy added.
Quona will look to invest in 25 companies over the next 12 months with its third fund.
“The rough idea is that we invest in around 20-odd companies out of each fund. With this fund being significantly larger in size and fairly oversubscribed, we will probably go up to 25 companies,” Rengaswamy said.
He said the fund also has a side strategy of making very small investments in promising early-stage companies, including those at the idea stage.
“If we like the idea and the founders, we will probably do smaller cheques. And those 6-10 investments will be over and above the 25. But the core investments will continue to be in that zone,” he added.
The nature of conversation with limited partners (LP) who have invested in the fund has changed amid a slowdown in funding due to macroeconomic headwinds, Rengaswamy pointed out.
“Till about 2021, LPs were pressured to allocate more to VCs and PE because the markets were at all-time highs… They were under pressure to write cheques every 18 months as opposed to 30 to 36 months now.”
He said LPs were now looking for a more differentiated strategy unlike earlier when they would put money into generic investment firms.
Quona Capital was established as an independent VC firm in 2015 by cofounding managing partners Monica Brand Engel, Jonathan Whittle, and Rengaswamy. It has made more than 65 investments so far.
“Since our earliest days, Quona has been dedicated to expanding the frontiers of financial inclusion — investing with conviction in markets and technology-enabled models that are improving access to and quality of financial services for the masses,” said Engel, who leads Quona’s investments in Africa, and Middle East and North Africa (MENA).
“Our prior fund performance, robust pipeline of inclusive fintech, and growing LP interest in our offerings are ringing endorsements of our view on the prospects of impact-oriented venture investing in emerging markets,” she said.
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