New York Entrepreneurs Pitch VCs on “FinTech” Startups

7/25/11Follow @arleneweintraub

On Friday, more than 70 venture capitalists and other investors braved a New York City heat wave, and made their way to the midtown office of financial-services giant UBS for the first ever FinTech Innovation Lab demo day. The lab was a 12-week long program for startups that are developing new technologies to serve the financial services industry. The six companies selected for the incubator-like experience—which was created by the New York City Investment Fund and Accenture—were in stealth mode until their presentations.

FinTech Innovation Lab is one of several programs the New York City Investment Fund has launched to support entrepreneurs in industries that traditionally haven’t gotten much attention from the venture capital community. During the program, the startup execs were mentored by representatives from 10 of the world’s top banks, including UBS, Bank of America, and Deutsche Bank. They also got feedback and advice from famous financial figures like JPMorgan Chase CEO Jamie Dimon and Kohlberg Kravis Roberts CEO Henry Kravis.

Entrepreneur Gerald Hanweck, whose startup is developing risk-management technologies, says participating in the lab program was invaluable. “It helped us get access to senior managers in banks,” Hanweck says. “The mentoring, advice, exposure—we got a lot out of it.”

The six FinTech companies received $25,000 in seed funding from NYC Investment Fund. They indicated during their presentations that they are looking to raise initial funding rounds of between $1 million and $5 million.

Maria Gotsch, the Investment Fund’s CEO, says 90 companies applied for the inaugural FinTech Innovation Lab. The Fund picked 20 finalists, who made oral presentations to a panel of representatives from the financial industry. She says most of the feedback she’s received from the participants has focused on the value of being able to hobnob with banking executives. “Each company got access to two or three banks as mentors,” Gotsch says. “Everybody understood this was about giving feedback to the startups. It was the [financial services] customers helping shape the products that the industry needs.”

Here are the members of the inaugural FinTech Innovation Lab:

Zipmark: An app that allows users to pay everything from their rent to their grocery bills via an electronic checking system that the startup says is faster than PayPal and costs less for payees than accepting credit or debit cards.

CB Insights: A provider of private-company data that’s used by lenders, private equity players, media outlets (including Xconomy), and more. CB has developed a technology called Mosaic, which assesses the health of private companies based on tweets and Facebook entries from employees, press articles, financing rounds, and other events.

Syphr: Developer of RateMatch, a Web-based system to help consumers determine their credit-worthiness, and CreditMart, a suite of back-office tools for lenders.

Lenddo: A social-media platform that borrowers in developing countries can use to manage their financial profiles and connect with institutional lenders.

Hanweck Associates: Risk-management tools that can squeeze the time it takes to complete complex financial analyses from days to hours.

Aqumin: Turns dense, mind-numbing spreadsheets into 3D visual depictions that allow portfolio managers, traders, and risk analysts to easily spot trends in their proprietary data.

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