Investing in Financial Technology for Social Impact · focus on areas like growth hacking, lead generation, distribution, search optimization, recruiting and client retention, etc

STRICTLY PRIVATE & CONFIDENTIAL QUONA CAPITAL MANAGEMENT

Investing in Financial Technology for Social ImpactLearnings from Quona Capital and RippleWorks

October 10th, 2018

STRICTLY PRIVATE & CONFIDENTIAL QUONA CAPITAL MANAGEMENT2

Agenda for today

Time Item Speaker

10:00 – 10:30 Quona’s approach to investing in and supporting growth stage, inclusive fintech companies in emerging markets, with specific focus on how we assess and mitigate technology risks

Monica Brand EngelCo-Founder and Partner of QuonaCapital

10:30 – 11:00 RippleWorks overview, discussion on sample projects Rick LevensonCTO in Residence of RippleWorks

11:00 – 11:30 Q&A All participants


About Quona


We believe in the potential of technology to catalyze financial inclusion in emerging markets

Delivering payment solutions so that Nadeem and Huda can pursue their dream of building a successful catering business

Digitizing payments so that entrepreneurs like Maureen don’t waste precious time

travelling to pay bills in person

Extending working capital loans to SMEs so that retailers like Rosa can hire employees, buy inventory, and grow their

business

Our Vision: Fintech for Inclusion


Fintech forInclusion in Africa, Latin

America, South & Southeast Asia

Growth capital for scale-up stage companies

Customer-centricity Scalability

Mission-aligned & capable teams

Large addressable markets

US$2M – US$7M with reserves for follow-on

Focus Stage Discipline Investment

We invest in scale-up stage inclusive fintech companies in emerging markets


Quona employs a multi-step investment process

Quona’s deal teams work closely with company management teams throughout the entire investment process

Sourcing Screening Due Diligence Closing Portfolio

management

Direct entrepreneur relationships

Referrals

Industry events/market landscaping

Introductory phone calls with company

Formation of investment thesis

Alignment with Quona

Assessment of business model & management, market, impact thesis, legal/accounting compliance, deal terms, etc.

Phone calls, on site visit, product/service demo, client focus groups and surveys, partner/vender meetings, reference checks

Legal documents executed on and capital disbursed

KPI collection and tracking

Governance and oversight activities

Value creation engagements


We evaluate several technology–related areas during due diligence (1/2)

Technical ExpertiseVerify the competence and agility of tech team

Platform/ProductAssess use cases, traction, and short/long term scalability

Customer Protection & Empowerment

Confirm focus on / protection of customer interests

Team composition to date and plans for the future Key responsibilities of team members and how they collaborate with other teams in

company Intention to create social impact

Scalability, flexibility, interoperability – use cases are targeted or monitored for productive ends and designed to add value for financially underserved

Ownership and operation of platform – third parties vs company Comparison to competition Plans for future

Structured customer journeys and implementation Support and complaint resolution process Pricing model is competitive; economics are aligned with success of customer over

expected lifetime (e.g., prevent over-indebtedness) Inclusive eligibility criteria and acceptance rates; minimal time requirement for

application Transparent marketing rates, fees, terms in place Product / process integrates relevant financial education

Components


We evaluate several technology–related areas during due diligence (2/2)

Data SecurityCustomer interests preserved; best practices followed

Operational ProcessSustainability and efficiency

Regulatory ComplianceEquipped to navigate changing regulatory landscape

Identify yellow/red flags (e.g., rampant fraud, major leakages, etc.) and how company manages/responds

Leverage network of technical experts to advise with companies Verify existence of data security policies / IT team

System and process management Version control and approvals Product management strategy as products evolve Roles, responsibilities, and execution (e.g. ops manager and implementation team are

in separate locations)

Check company’s compliance with local, state, national and/or regulatory requirements and its relationship to regulators

Assess status of company licenses Benchmark against other players in the market

Components


Case Study: How Quona evaluated Coins.ph

Quona’s investment thesis in Coins.ph Learnings

Coins.ph is transforming payments in SE Asia Critical issues evaluated

Business model Revenue model Technology Regulatory compliance Execution

Strong financial inclusion thesis Management’s commitment to mission One stop platform for payments Defensible growth strategy Blockchain technology

Mgmt. expertise in scaling tech platforms; metrics driven

Alignment on technology use cases; verified leakages can be spotted quickly

Verified company had licenses for remittances and payments; learned it was proactively working with regulators on guidelines for blockchain applications

Confirmed that Coins.ph’s pricing model incentivizes customers to remain on electronic payments and that partner tie ups have high margins


Quona’s partnership with RippleWorks

In 2016, Quona and RippleWorks partnered to bring a wide range of startup industry experts who focus on areas like growth hacking, lead generation, distribution, search optimization, recruiting and client retention, etc. to its portfolio companies

RW has conducted 4+ engagements with Quona’s portfolio companies so far and hosted 2+ workshops involving Quona’s portfolio companies


Annex


Quona’s portfolio

Documents

Investing in Financial Technology for Social Impact · focus on areas like growth hacking, lead generation, distribution, search optimization, recruiting and client retention, etc