DealmakingWomen in Fintech

Women in Fintech: A conversation with Quona Capital’s Monica Engel

"Fintech is at the intersection of two industries where women are underrepresented - financial services and technology"

Monica Brand Engel started her career in Silicon Valley and later served as managing director of the Frontier Investments Group, an early stage venture equity fund investing in financial service companies. 

She now serves as co-founder and partner of Quona Capital, a Washington, D.C.-based investment manager focused on fintech opportunities for the unbanked. Quona is focused on sub-saharan Africa, Latin America and India and leverages a strategic relationship with Accion, a microfinance global leader. Quona is the investment manager for the Accion Frontier Inclusion Fund and Frontier Investments, the first, dedicated global fintech funds for the unbanked.

FL: Tell us about your background and how it led to you founding a VC firm.

Engel: My formative professional years were in Silicon Valley. I started on the operating side, working with and ultimately launching alternative lenders that served the small business sector. I graduated from Stanford’s business school in the late 1990s as the internet boom was taking off. That Silicon Valley ethos of entrepreneurship, innovation, can-do optimism, risk-taking and the smart use of capital and technology to solve hard problems has stayed with me for the rest of my career, even as I crossed borders into nascent venture ecosystems like Latin America, Africa and Asia. 

After business school I ended up working at a venture capital firm in South Africa before taking a head of product role at a well-established financial inclusion organization where I was in charge of bringing innovative financial solutions to underserved global customers. I was embedded in retail financial institutions, helping them innovate and expand their product offering. The challenges I faced in helping successful retail financial institutions expand beyond microfinance led me to explore whether investing in fintech could be a more efficient path to improving access and quality of financial services to the underserved.

FL: What does your VC fund focus on and why? Why should investors be interested in emerging markets? There are risks investing in emerging markets, but why are impact investors stepping up as small to medium size businesses struggle to survive the impact of the pandemic? 

Engel: Quona Capital is a venture firm focused on fintech for inclusion in emerging markets. We have over $360 million assets under management across our flagship Accion Frontier Inclusion Fund (AFIF) and Accion Quona Inclusion Fund (AQF) deployed in an active portfolio of investments across Latin America, Africa and Asia. Both funds include a variety of international investors, ranging from development finance institutions, global asset managers, investment banks, foundations, high net worth individuals, insurance companies and Fortune 500 companies.

They invest in Quona because they find our investment thesis compelling and they appreciate the insights we provide on which types of fintech investments are best positioned to successfully scale with impact. COVID-19 has accelerated interest among investors as well as the available pipeline as technology-enabled financial services are well-suited to a world where one must maintain social distance and transact virtually, especially in a small business retail setting. Though the impact and management of COVID-19 has varied from market to market, our portfolio overall has had step-ups in carrying value, reflecting the net positive performance of the underlying companies.

FL: How do you decide which entrepreneurs to fund? What are some qualifications?

Engel: Entrepreneurs are key to the success of any venture business and play an even more pivotal role in a portfolio like Quona’s. As a venture firm, Quona looks for the same core qualities that all VCs prioritize — vision, resilience, domain expertise, authenticity, emotional intelligence and confidence in communication.

In addition, Quona looks for entrepreneurs that have strong connections to the markets they are serving —  they have lived and worked in these markets, they have deep relationships and are well -respected by people of influence, they speak the local languages and know the customers and they are able to attract phenomenal local talent and grow that talent. As an impact fund, Quona wants entrepreneurs who share our ‘profits-with-purpose’ ethos and are looking to build companies that radically improve access and quality of financial services for the underserved. 

FL: Please discuss the current environment for females working in fintech, emerging markets and what it takes to succeed as a woman in VC as venture funding falls to 2017 levels for female founders.

Engel: Fintech is at the intersection of two industries where women are underrepresented – financial services and technology. There are women rising in the ranks of fintechs in functions they have long been well-represented – operations, products and marketing. In a recent diversity and inclusion deep dive that Quona undertook in its portfolio, gender parity was the one issue that was on the radar screen of almost all companies globally, which many were undertaking proactive measures to address.

Companies are not only systematically tracking and reporting on the number of women in their ranks, but also by their function and level of work. They are also creating affinity groups, mentoring programs, recruiting, outreach and other efforts to help create more inclusive and welcoming environments for women and other underrepresented groups. The first and most important step is to be intentional about the effort and proactive in developing strategies to attract and retain women.

FL: What advice would you give female entrepreneurs, especially those of color?

Engel: There are three pieces of advice I provide women and people of color looking to break into fields where they have been underrepresented:

  • Master your trade: Figure out what you’re great at and master it, delivering reliably high quality results. There is no substitute or shortcut for building domain expertise and differentiating oneself through excellence. 
  • Find a mentor: Most stories of the “positive deviant” — the exception to the trend we are looking to mainstream involve someone with power or privilege noticing and helping someone early in their career. Mentors can help advise you at pivotal points in your professional journey. They also are invaluable confidence builders as they provide a sounding board in decision making, behaviors to model, mistakes to learn from and a supportive ear when you hit roadblocks. Here is one place men can make a real difference by creating a more welcoming environment for women and underrepresented groups to thrive in.
  • Prioritize and position: Many talented women remain heads down and focused on their work, forgetting that professional development also requires periodically helicoptering up, assessing the landscape and one’s position. It is important that women not only do great work, but that others see it, which can include speaking up in meetings, leading initiatives and publishing insights. These efforts are time consuming, so it’s important to set clear goals about what’s most important to you and settle for good enough on everything else. Many women get caught up in perfecting, pleasing or pacifying, rather than getting clear on what they need to achieve their goals and positioning themselves to be top of mind when opportunities arise. Bringing women onto boards and into leadership positions often creates new channels for other women to rise, but rising talent need not wait to chart their own paths.        

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