We had written about Eko Financial Services in a two-part series (Part 1 linked here). Today they are announcing the closing of a $5.5 million funding round from Creation Investments, a Chicago-based social ventures fund. I had a chat with Abhishek Sinha (Eko co-Founder & CEO) soon after their funding closed and he shared some other exciting news as well – the noteworthy detail being that they expect to become profitable a lot earlier than previously planned. Will make a follow-up post on that. Meanwhile, here’s the complete press release from Eko/Creation Investments.
New Delhi, India, July 9, 2011.Â Creation Investments Social Ventures Fund I (â€œCISVFâ€ ), a US based private equity fund, led a $5.5 million USD growth equity investment into Eko India Financial Services Private Limited (“Eko” ), a leading Business Correspondent (“BC” ) and mobile banking technology provider in India.
Through its robust mobile-based platform and 1,300 agents, Eko provides its customers with basic banking, savings and payment services, along with merchant transactions, bill payment, and cash collection services. Eko’s solution allows customers to open bank accounts, deposit, withdraw and remit money in real-time at the agent using number dialing from any mobile phone. Through its branchless banking service offering and integration with India’s largest banks, Eko empowers the unbanked in India to access financial services and transact with over 250 million bank accounts.
As a technology provider, Eko supports other Business Correspondents, including Microfinance Institutions (MFIs), extending their outreach and product offering. Business Correspondents have used Eko’s solution due to its real-time connectivity to State Bank of India’s core banking system, the ubiquity of access, near zero start-up CAPEX for the agent, low client literacy requirements, and proven product design.
We are thrilled to have partnered with the strong management team of Eko, providing further human and financial capital to assist in scaling their exceptional product offering. We believe that Eko has best-in-class technology which gives easy, secure, inexpensive and convenient last-mile connectivity to the unbanked, migrant workers and the poor, said Patrick Fisher, CEO and Co-Founder of Creation Investments.
The $5.5 million USD in growth equity was raised jointly by Creation Investments Capital Management, LLC and Promus Equity Partners, LLC from a consortium of high net worth investors and a core investment from CISVF, closing in June 2011. The capital raised will be used to fund the growth of Eko’s mobile banking platform and agent footprint, facilitating deeper financial inclusion and outreach to the unbanked and under-banked in India.
In Creation Investments, we believe we have found an extremely valuable partner, who is aligned to our values and committed to working with us to achieve our ambitious growth plans, said Abhishek Sinha, Co-founder and CEO of Eko. Eko had earlier received grant funding through the CGAP Technology Program, which is co-funded by the Bill and Melinda Gates Foundation.
Eko has served 912,455 customers through its 1,300 customer service outlets and employs 100 people.Â Recently, Eko crossed $223 million USD (1,000 crore INR) of transactions processed across 2.3 million customer transactions. Eko is headquartered in New Delhi, India with operations in Delhi and the National Capital Region (NCR), Bihar and Jharkhand.
Mayer Brown LLP represented Creation Investments Social Ventures Fund I and the consortium in this transaction, continuing to show its commitment and leadership in the Impact Investments sector.
About Creation Investments
Creation Investments is an alternative investment management company committed to fighting global poverty through direct, for-profit investments in businesses which promote economic development. Creation Investments Capital Management, LLC manages and sponsors impact investment funds and one-off investments in social ventures, seeking to maximize financial and social returns on investment. Creation Investments was recently selected as a top impact investment fund manager by ImpactAssets 50, selected after a rigorous process based on a solid track record of delivering social and environmental value in addition to attractive financial returns.
For more information about Creation Investments, go to:
Eko India Financial Services Private Limited (Eko) is a leading Business Correspondent (BC ) and mobile banking technology provider in India. As a BC of the State Bank of India and ICICI Bank, Eko converts every retail shop into a low-cost distribution and payment infrastructure, extending the reach of banks to enable small value financial transactions instantly.
Eko presently serves over 900,000 customers across over 1,300 outlets (grocers, pharmacies, stationery shops, small cyber cafes, telecom shops etc.) across Delhi-NCR, Bihar and Jharkhand. These outlets have bank and Eko branding where customers can obtain a no-frills savings and other bank accounts in a matter of a few minutes. Eko also enables deposits, withdrawals and remittances for customers. Using any mobile phone and simple text messages, the agent or the customer may transact with core banking systems on a real-time basis, anywhere.
Additionally, Eko enables instant disbursal of payments to Accredited Social Heath Activist (ASHA) workers employed under the National Rural Health Mission in Sheikhpura, Bihar. Eko has also initiated a pilot for a small ticket over-the-counter Micro Life Insurance product.
Eko has received recognition from several national and international forums and won many awards including NASSCOM – Emerge 50, PCQuest – Best IT Implementation, mBillionth Award by Digital Empowerment Foundation, World Summit Award by UNGAID, Best Digital Socio-economic Initiative by IAMAI, Leap of Faith Award for Entrepreneur of the Year in Financial Services by ET NOW, winner of Innovator’s Competition for DST-Lockheed Martin India Innovation Growth Program, Coolest Startups by Business Today and others. Eko hopes to reach out to millions of financially excluded people over the next few years and extend formal financial services at their friendly neighborhood store.
For more information about Eko, go to: