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US-based Omidyar Network, the family investment office for eBay founder Pierre Omidyar, will spin off its financial inclusion investment arm as Flourish Ventures, according to TechCrunch.
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The new firm will have $300 million in capital — including the company’s existing $200 million portfolio — and will invest in fintech companies that make a social impact, while also bringing good financial returns. Omidyar Network has been investing in the fintech space for over 10 years, and this marks its third spinout: It previously launched a US emerging technology initiative Spero, and a governance and citizen engagement-focused group, dubbed Luminate.
Omidyar has great experience investing in the fintech space, making its portfolio worth watching. The firm’s global portfolio includes 40 fintech companies that help low- and middle-income households as well as small businesses better manage their finances, including alt lender Lenddo, which uses social media data to extend credit to applicants, and Aspiration, which helps people bank more ethically by promoting sustainable investment portfolios.
With these investments, Omidyar has tapped a market of fintechs that use nontraditional data sets to explore new ways of scoring consumer credit worthiness — a fintech area that continues to see high demand and growth. Additionally, Omidyar recently funded a study called the US Financial Diaries that looks into how families manage their finances; these insights likely help the company make an educated decision on which fintechs will be worth investing in and better advise and support these startups.
Flourish will likely have plenty of fintech investment options as fintechs increasingly focus on financial inclusion and new markets emerge as fintech centers. There’s been a rise in fintech activity in markets like South America, where fintech funding grew 167% from $202 million in 2017 to $540 million in 2018, while in Southeast Asia, funding ticked up 142% from $199 million in 2017 to $485 million in 2018, for example.
Additionally, as an increasing number of fintech-focused funds crop up, having an investment focus area might make Flourish a particularly attractive funding option for those looking to promote financial inclusion.
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Source: Business Insider – feedback@businessinsider.com (Lea Nonninger)