DEEP DIVESExclusive to Strategy Plans
December 15, 2015
New York is rapidly growing as one of the world’s hubs of innovation. Some of the hottest FinTech startups are represented in New York and new entrants can find endless opportunities in the global trading center. The LTP team has been following the development of the industry and some of the most notable FinTech companies represented in the city.
For FinTech startups and bright entrepreneurs looking to explore New York as the base to disrupt the industry, it’s important to understand the landscape and know the players. Here are some of the hottest FinTech startups and more established companies operating in New York in addition to those who are based in the city.
The New York FinTech industry has companies working in a variety of sectors. Lending, marketplace, investment management and trading are denser than others, which create more opportunities for startups aiming to enter into sectors such as accounting, insurance and payments. Let’s look closer at some of the hottest FinTech startups based in NYC.
Marketplace:
The company improves the way startup employees are paid by unlocking the value of their equity compensation in a way that benefits all key players: the shareholder, the company and the investor. EquityZen is backed by leading venture capital investors like Dave McClure's 500 Startups, WorldQuant Ventures, sovereign wealth funds, family offices, wealth managers, and influential investors from finance, venture and law around the world.
SecondMarket provides software for streamlining complex private securities transactions. Since 2013, SecondMarket has closed over $2.5 billion in transactions. SurveyMonkey, Sonos and Kabam are among the company’s clients. SecondMarket has raised $32.4 million from investors like FirstMark Capital and The Social+Capital Partnership. The company also runs The Bitcoin Investment Trust. On October 22, 2015, SecondMarket announced that it has been acquired by NASDAQ.
SeedInvest is powering startup which invests through its premiere equity crowdfunding platform that connects venture capital, angel investors and accredited investors. The platform connects more than 14,000 investors to highly vetted startups without charging investor fees or carried interest. SeedInvest sources deals from top incubators, accelerators and venture funds. The platform vets and accepts only around 1% of its total deal flow. 500 Startups, Spark Capital, Google Ventures, Great Oaks Venture Capital, Techstars and others invest through SeedInvest.
Axial is an online network for professionals who operate, advise, finance and acquire private companies. The company has raised $8.5 million from investors like First Round and Lerer Ventures. The platform has grown 100% each year since inception in 2012. Axial counts 20,000 CEOs, advisors, investors and lenders, 4,200 deal opportunities across all industries and capital types. About 250 deals go live every week and 125 deals are closed every month on Axial. Vistage International, S&P Capital IQ, ACG, The National Center for the Middle Market and The Entrepreneurs' Organization are the company's partners.
TrustedInsight is a platform for institutional investors to discover investment jobs, talent, alternative investment news, syndicates and top investment opportunities. The company is backed by 500 Startups, Founders Fund, Real Ventures, RRE Ventures, Data Collective and others. Funds of $3.2 million have been invested in TrustedInsight. It is a leading institutional syndication platform whose members manage over $18 trillion in assets.
ACE Portal is a platform that enables brokers to list and manage private placement offerings and connect with investors. It allows investors to identify, access, and evaluate investment opportunities through a centralized platform comprised of offerings represented by investment banks and placement agents. Agents can selectively target discrete investor classes and utilize process management tools to control deal access, facilitate due diligence and simplify record retention.
Gust connects startups with the largest collection of investors across the world. Over $1.8 billion have been invested in startups through Gust. Investors can access powerful deal flow management tools on a secure platform. The platform also provides analytics from the industry experts for better investment decisions. More than 11,000 startups and 150 organizations are registered on the platform in New York. With more than 1,000 investment groups across 80+ countries, Gust is the global industry standard for early-stage investing.
Onevest provides an investing platform that connects early-stage tech companies with accredited investors. Onevest charges a 7.5% commission fee on funds raised through its investor network. Additional fees are incurred for due diligence, marketing and legal reasons. The company is valued at more than $1 million with $3.3 million in funding from investors like Mid-Atlantic Angel Group, Robin Hood Ventures, Talent Equity Ventures, SOL ventures and others. Onevest counts more than 72,000 entrepreneurs and has helped startups raise more than $23 million. Onevest is listed as one of the top 10 crowdfunding platforms for startups.
Orchard Platform is a technology and infrastructure provider for marketplace lending. Orchard supports operational efficiencies to help institutional investors, investment managers and loan originators connect and transact. The platform enables institutional investors and investment managers to allocate capital to marketplace lending, with best practices, manager identification, and portfolio benchmarking while also providing modeling, order management, reporting & analytics and strategic access to supply. Orchard has raised more than $44.7 million. Max Levchin, Vikram Pandit, John Mack, Hans Morris, Spark Capital, QED Investors, Ben Barokas, Doug Atkin, Social Leverage and Brooklyn Bridge Ventures have invested in the company so far.
Trading:
TradeBlock is a venture-backed company serving institutional financial firms with products that help optimize trading using blockchain technology. Andreessen Horowitz, Chris Fischer, Data Collective, Digital Currency Group, F-Prime Capital Partners, FinTech Collective, Hard Yaka and Y Combinator have invested in the company so far. TradeBlock is the world's leading toolset for institutional bitcoin traders, featuring market analytics, blockchain insights, order management, trade execution, team communication and compliance automation.
Coinsetter is an NYC-based forex trading platform for bitcoin. It is a high-performance bitcoin exchange that offers fast and reliable trading in addition to liquidity sourced from other global exchanges. Cryptocurrency Partners, Barry Silbert, Tribeca Venture Partners, Cryptonaut Ventures and Archangel have invested in the company. Coinsetter has partnerships with BitcoinATM360, Tradewave and LaunchKey. Up to 0.25% is charged as a trading fee on the platform.
Lending:
CommonBond is a marketplace lending platform that lowers the cost of student loans for borrowers and provides financial returns to investors. The platform collects money from individual investors who are willing to support other students and invests them into student loans. An origination fee is charged, but the loan rates are fixed.
Bond Street is an online lender to small business. Loans vary from $50,000 to $500,000 with rates starting at 6% with 3% of origination fee. Approval takes less than seven days. Spark Capital, Jefferies, Homebrew, Founder Collective, Eagle Cliff, Red Swan and others have invested in the company along with such notable investors as Founder and CTO of Airbnb Nathan Blecharczyk and Founder of Anvil Capital Michael Liou. The company raised $110 million earlier this year.
OnDeck is a lending platform for small businesses. OnDeck has loaned over $2 billion to small businesses across 700 industries in all 50 states and Canada. The company’s proprietary small business credit scoring system, the OnDeck Score, evaluates thousands of data points to deliver a fast and accurate credit decision. Restaurants, medical professionals and retailers, among other small businesses, choose OnDeck for its convenience, speed, and direct access to growth and working capital. Earlier this year, Ondeck partnered with Prosper to develop new solutions to address their customers’ needs that expand upon their current referral arrangement.
Payments:
CardFlight provides tools and technology to help merchants accept in-person credit card payments on iOS and Android devices. It enables app developers to easily incorporate card-present payment acceptance into mobile apps. CardFlight's open platform connects mobile app developers with payment processors, focusing on the 90% of credit card payments that happen in real life. Entrepreneurs Roundtable Accelerator, Plug & Play ventures, Apostolos Apostolakis, Payment ventures, FF venture capital, Great Oaks Venture Capital and Atlas Venture and others have invested in the company.
Zipmark is a mobile payments transaction platform enabling businesses to send and receive digital paychecks securely. Zipmark enables businesses to send and receive 100% digital checks without risk, at a reasonable and transparent cost. It allows paying bills from Zipmark-enabled merchants or send and receive money with other people. Zipmark uses electronic checks that are a financial industry standard and a safe and reliable way of processing payments. The company has raised $3.5 million till date. Contour Venture Partners, Partnership Fund for New York City, NYC Seed, Primary Venture Partners, Village Ventures and Scout Ventures have invested in Zipmark.
Investment Management:
Betterment is the smarter automated investing service that provides optimized investment returns for individual, IRA, Roth IRA & rollover 401(k) accounts. The company has raised $45 million from investors like Menlo Ventures, Bessemer Venture Partners, Anthemis Group and Capital Partners. Over 120,000 customers have invested more than $3 billion with Betterment.
OpenFin is a financial services-based software developer that empowers the world's largest banks and trading platforms to build high-performance, multiwindow HTML5 applications. OpenFin provides runtime technology solutions for financial desktops. OpenFin has raised $6.6 million so far. Tom Glocer, Cris Conde, Pivot Investment Partners, Nyca Partners and Bain Capital Ventures have invested in the company.
Rizm (previously EquaMetrics)
Rizm is a financial software and systems developer that specializes in algorithmic trading applications. Rizm allows traders to create customized algorithms without needing to know coding. Rizm has raised $5.1 million so far. Among its investors are Joshua B. Siegel and Rubicon Ventures.
Estimize is an open financial estimates platform that aggregates earnings and economic estimates from independent, buy-side and sell-side analysts, along with those of private investors and students. Around 15,083 analysts contribute to Estimize, resulting in coverage on over 1500 stocks each quarter. The Estimize consensus has proven more accurate than comparable sell-side data sets over 69% of the time. The company has raised $2.6 million from Contour Partners, Longworth Venture and Valuestream Labs.
Pellucid was designed from the ground up for advisory professionals—the millions of people who provide timely, data-driven analysis and expert advice to clients or internal stakeholders to guide and accelerate decision-making. Pellucid delivers key capabilities for those professionals, such as content management and fulfillment, sharing of best practices and exceptional data visualization in a smart, integrated solution.
Hedgeable automates sophisticated investing for busy professionals in less than five minutes with no minimum investment required. It has developed several proprietary systems to offer services that were previously only available to the ultra-high net worth, like risk management, hedging, bitcoin investing, impact investing and private equity. There is no minimum investment to access the Hedgeable platform. The company calls itself The Google of Investing.
Thinknum is a FinTech startup that develops tools for analysts. It is a powerful Web platform to value companies. Investors and financial analysts use Thinknum's intuitive tools for research, data analysis and collaboration, enabling them to generate unique insights. 500 Startups and HKB Capital have invested in Thinknum.
Education & Personal Investing Platforms:
SmartAsset is a startup incubated by Y Combinator. It provides free and interactive tools to help retail consumers make smarter decisions on home buying, refinance, retirement, life insurance, taxes, investing and personal loans. SV Angel and Javelin Ventures have invested in the company.
LearnVest empowers everyone to take control of their personal finances. The company provides expert advice, resources and financial plans that fit one’s budget. So far, LearnVest has raised $69 million. Northwestern Mutual, Accel Partners, American Express Ventures, Conversion Capital have invested in the company. LearnVest’s program focuses on behavior change and taking consumers from cutting expenses to budgeting for goals to investing their money. Northwestern Mutual acquired LearnVest for over $250 million.
PayPerks is a Web-based financial services company for consumers with low and middle levels of income. PayPerks partners with card programs to offer educational content and usage rewards to their cardholders. PayPerks is available on some of the largest prepaid card programs in the country, including Direct Express. PayPerks has given away more than $150,000 in prizes.
Crowdability is the source for data, research and education on the emerging equity crowdfunding industry. They provide original content, data and education as well as access to a panel of early-stage investing experts (VCs, professional angels, etc.). CrowdabilityIQ is a stock screener for early-stage private companies. The first software of its kind, CrowdabilityIQ provides ratings and rankings on hundreds of private equity investment opportunities from all across the Web.
Security, Fraud & Authentication
BillGuard is a personal finance company that has secured more than $75 billion since its inception in 2010. IA Ventures, Bessemer Venture Partners, Khosla Ventures, Founders Fund and Social Leverage have invested $13 million in the company. BillGuard helps users to identify fraudulent charges on their credit and debit cards as well as keep track of spending on the Web through an iPhone app. Eric Schmidt, Peter Thiel, Adam Fisher and others have also invested in the company. Around $70 million in unauthorized charges were found by BillGuard, which has 1.2 million registered users. BillGuard was acquired by Prosper for $30 million.
Payfone is a leader in mobile identity authentication. Payfone’s suite of network authentication services provides unparalleled mobile security while eliminating friction from the customer experience. The company is backed by leading venture firms, financial institutions, mobile network operators and Early Warning. Since June 2015, authentications processed by Payfone have grown by 340%. Payfone expects this rate of growth to continue, resulting in more than 3 billion Payfone authentications processed next year.
Banking
Moven is a disruptive mobile-centric banking app which described by reputed sources as a "bank of the future. Moven's app, debit card and contactless payment sticker provide real-time spending insights that motivate customers to make smarter decisions and save more. Moven is an alternative to traditional bank deposit and payment products with high fees and little value. The company has accumulated more than $24 million in funding from Route 66 Ventures, Standard Bank, SBT Venture Capital, Raptor Ventures, Anthemis Group and others.
Some of the notable venture investment firms in New York.