Six entrepreneurs pitched their financial technology startups on Thursday during New York City’s FinTech Innovation Lab’s fourth annual Demo Day.
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Founders from Kasisto, Enigma, LMRKTS, Pymetrics, Revolution Credit and Standard Treasury gave brief demonstrations of their technology and discussed their development over the 12-week program.The startup entrepreneurs received mentoring by executives from firms such as Bank of America, American Express, Goldman Sachs and Bain Capital Ventures.
FinTech Innovation Lab was co-founded in 2010 by the Partnership Fund for New York City and Accenture.
“We have more seasoned entrepreneurs this year, and I think that’s a great sign for the program,” said Partnership Fund for New York City CEO Maria Gotsch.
Each year, participating financial institutions tell the Partnership Fund for New York City what areas or problems they would like to see addressed by innovative technology. The banks themselves then choose the startups from the application pool.
Here’s a brief overview of the six startups that participated in this year’s FinTech Innovation Lab:
• Revolution Credit is building a platform that uses financial education games to judge borrower’s creditworthiness and help improve the decision-making process around lending • Standard Treasury makes white-labeled and co-branded developer platforms for banks; the company says it helps decrease service costs and churn while increasing transaction volumes • Pymetrics uses neuroscience games and big data to match candidates to jobs • Kasisto is a spinoff from the company that created Siri; it’ working on a virtual personal assistant for banking mobile apps • Enigma pulls together public data on companies, people and locations, indexes the information and provides it to financial institutions to support underwriting and trading processes • LRMRKTS helps banks report, reconcile and reduce risk when it comes to derivatives
Many of the entrepreneurs that presented said that participating in the program helped them fast-forward important conversations with potential customers in the financial industry.
NYC’s Growing Fintech Scene
With the FinTech Innovation Lab in its fourth year, Gotsch noted the tremendous change in the fintech ecosystem in New York City.
“Standard Treasury is a very hot company from the West Coast and Silicon Valley, and they chose to come to New York to participate in the program, so the message is getting out geographically,” said Gotsch. “If you’re going to build a fintech company, the domain knowledge that’s in New York City both within the institutions … and the people that may be leaving the institution. If you’re a fintech company, you want to access that [and hire] someone with 20 years of experience in how a bank operates versus trying to figure it out on your own.”
According to research from the Partnership Fund for New York City and Accenture, deals and investments in New York’s fintech scene have grown at twice the rate of Silicon Valley since 2008. Globally, fintech startups received $1.7 billion in investments in the first quarter of 2014 alone – a huge increase from 2008, when these companies received $928 million over the course of the entire year.
With regard to the FinTech Innovation Lab, the 18 alumni companies have raised a combined $76 million in financing after participating, and the program recently saw its first major acquisition.
“Inktank was sold earlier this year for $175 million, but I think as we care also about building sustainable companies … the sales cycle is very long for banks [and] companies from earlier years are now starting to sign multimillion dollar contracts,” said Gotsch.
And despite some bubble speculation, Accenture global industry managing director Bob Gach, one of the co-founders of the lab, said he’s not too worried about New York City’s fintech ecosystem.
“What I think we can say with great certitude is that the need here is still in its early days. So when you think about the budgets of these banks and the needs that they have and the trends in the digital community, I think we all feel very confident that there are years more progress ahead of us,” said Gach.