New York City Investment Fund Supports Biotech, Cleantech, and Now “Fintech” Startups

5/9/11Follow @arleneweintraub

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experts from the financial services industry to both identify opportunities for new technology and to find the inventors and entrepreneurs who can bring those products to market.

The startups that won NYC Investment Fund’s first fintech competition received $25,000 each—but in their case, the funding is less of a focus than the mentorship is. During their three months in the fund’s FinTech Innovation Lab, the entrepreneurs are working closely with chief technology officers from financial service firms. That will give them the chance to refine and beta test their technologies within those firms.

On July 22, the fund will host an investment day—not unlike the “demo days” that tech incubators frequently hold—so the fintech startups can present their technologies to financial services firms and venture capitalists.

Gotsch says the NYC Investment Fund is now thinking about establishing a program for the city’s other underserved sector: cleantech. Gotsch and her staff haven’t hit on the right strategy, so for now, they’re focusing on making individual investments in cleantech startups. The fund has invested in four NYC-based companies so far, including OwnEnergy, a portfolio of wind farms, and US Energy Group, which develops energy-management technology.

With just four holdings, NYC Investment Fund has more investments in New York-based cleantech companies than any fund in the world, Gotsch says. “That’s a sign of a market failure,” she says. “It shows that our companies haven’t attracted enough capital.”

In its ongoing effort to marry tech entrepreneurs with local venture capitalists, NYC Investment Fund launched a new networking organization called TechConnect in April. Its first mixer attracted 50 entrepreneurs and venture capitalists. “The feedback was very positive,” Gotsch says. “We have two more events already on the schedule.”

And NYC Investment Fund has identified a new industry that it thinks has the potential to further diversify the city’s economy: digital manufacturing. Companies in that space use technologies including 3D printing, which allow them to produce toys, jewelry, and other objects inexpensively, straight off of digital files send in by the objects’ designers.

New York is already home to a handful of digital manufacturers, including Shapeways and Quirky. Gotsch would like to see more startups follow in their footsteps. “You use software to design your object, you e-mail your file to them, and they make it. It has very interesting implications for whole design and fashion centers in New York,” she says. “We haven’t yet decided where to deploy the capital. But we want to figure out how to make New York City a leading center for digital manufacturing.”

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