Meet the Investor: Arjuna Costa, Flourish


Arjuna Costa left a lucrative career on Wall Street to start funding microfinance organisations in Sub-Saharan Africa, and now he is part of the team that heads up US$500m fintech venture fund Flourish.

A Harvard alumnus who worked for Lehman Brothers in the 1990s, Costa helped back microfinance firms with a focus on countries such as Zimbabwe and Uganda, and then began advising governments on restructuring and privatising banks in Africa. He then built a private equity fund based on the turnaround of underperforming banks.

He told Disrupt Africa the move into investing in tech startups came after a realisation that tech was now a valid tool to solve the challenges he had been working on over the previous 10 years.

“I found that I could bring a unique perspective to investing, with my deep understanding of consumer challenges and their complex relationships to money, as well as the structural and economic challenges for banks to serve the mass market,” he said.

“At the start of this decade, it was clear that something was changing with the early green shoots from M-Pesa and other signals from the growth of mobile across emerging markets. Additionally, the economics of scaling a mass market business were being dramatically altered by social, mobile, big data analytics, and cloud computing, alongside a new generation of entrepreneurs using tech to solve social problems. That was just the beginning of the fintech trend.”

This renewed focus took Costa to an emerging markets hedge fund focused on consumer finance, before he joined the Financial Inclusion team at Omidyar Network, the impact investment firm started by eBay founder Pierre Omidyar, which recently evolved into its own independent entity known as Flourish. At the US$500 million Flourish fund, he is one of three managing partners alongside Tilman Ehrbeck and Emmalyn Shaw. Costa explained the reason for the spinout.

“The Financial Inclusion Initiative was one of the first initiatives within Omidyar Network. For the last 10 years, Omidyar Network provided the support system and runway to experiment, evolve our investment theses, and build a solid portfolio. During this time, we learned a lot by supporting innovative entrepreneurs who have made great contributions to advance the space and build a fairer, more inclusive financial system for everyone,” said Costa.

“Also, during this time, the landscape evolved, and the challenges faced by underserved consumers all over the world became more complex. Against this backdrop, Pierre Omidyar and Omidyar Network’s board determined that it was time to double down in support of our mission. We’re now our own independent entity at Flourish, and we continue to be funded by Pam and Pierre Omidyar. Our team remains focused on empowering people around the world through financial solutions that help them seize economic opportunity and achieve financial health.”

As a sector-oriented firm, Flourish takes a long-term approach to changing or building entire ecosystems, with Costa saying some of its earlier investments are already delivering on this mandate.

“As an evergreen fund with a long-term view and patient capital, we back entrepreneurs who are pushing the envelope with transformative ideas to advance financial health, inclusion, and economic opportunity for everyone,” he said.

Flourish, he said, sees digital-only, mobile-first models as a game-changer for consumers.

“They get access to better, personalised financial services offerings, at far lower costs than ever before. On the provider side, costs can be reduced significantly in comparison to brick-and-mortar models,” said Costa. “Additionally, the rich interactions made possible by smartphones provide insights into customer behavior, which in turn help to make products more relevant to them – creating a virtuous cycle in which everybody wins.”

Because it looks for transformative ideas, Flourish tends to invest early on, mostly getting in on seed and Series A rounds.

“But once we have invested in a company, we usually participate in follow-on investments, as well as provide expertise in the shape of portfolio services, such as finance, legal and human capital, to help the business grow,” Costa said.

The company’s focus is global, and it makes investments in Latin America, Asia, and the United States in addition to Africa. Nonetheless, it has several investments on the continent, where Costa says it sees a great deal of ingenuity and creativity.

“While the continent is vast and diverse with no shortage of challenges, we see a fast-growing entrepreneurial community focused on tackling these big issues and making lives better for Africans,” he said.

Omidyar investments now part of the Flourish portfolio include Kenya’s Pula, an insurtech platform for smallholder farmers, Nigeria’s Lidya, which gives small business owners access to capital, and Nigerian payments company Paga. Costa said the entrepreneurs behind these companies were building successful and impactful businesses, lack of infrastructure notwithstanding.

“And there are many other examples. As we continue to see adoption of smartphones grow, data costs fall, and new technologies such as AI advance, the African tech space will continue to mature and attract capital and talent,” he said.

Flourish brings more to the table than just money, with Costa saying it understands how hard it is to build a business from the ground up.

“We offer our portfolio companies a suite of services beyond financial support – from filling key positions to engaging with regulators and the larger ecosystem to helping entrepreneurs understand how to measure progress and impact,” he said.

“This kind of additional support is a key differentiator for Flourish, especially in emerging markets where resources such as legal, finance, and human capital are simply more scarce.”

In emerging markets like Africa where capital is scarce and there is less infrastructure to support new ventures, building high impact, high return businesses can take longer. As a result Costa and Flourish are prepared for longer timeframes.

“We are comfortable taking a long-term view in these cases, because along with the potential for impact, several of these investments are at the frontier and can serve as powerful demonstrations in moving the entire sector forward,” he said.

“Now that we have launched Flourish, we want to continue to evolve our investment theses in order to support bold ideas that can really help people improve their lives. Through our evergreen structure, we have US$300 million at our disposal for the next five years to deliver on this mission.”


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Passionate about the vibrant tech startups scene in Africa, Tom can usually be found sniffing out the continent's most exciting new companies and entrepreneurs, funding rounds and any other developments within the growing ecosystem.

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