The 10 start-ups participating in the 12-week VC FinTech Accelerator, powered by global technology provider FIS and hosted by the Venture Center in Little Rock, were named Monday.
The participants, chosen from 150 applicants, are:
• Akouba of Chicago, which offers an underwriting platform for lending by community and regional banks to small businesses;
• Bleu of Los Angeles, which offers a mobile and merchant point-of-sale system enabling Bluetooth (beacon) payments;
• Dream Forward 401K of New York City, which offers low-cost 401(k) retirement plans designed to boost employee savings rates;
• Flutterwave of Mountain View, California, and Lagos, Nigeria, which offers technology and infrastructure for seamlessly and securely processing payments, remittances and digital services across Africa for the banked and unbanked;
• Fundseeder of Westport, Connecticut, which offers a data and performance analytics platform for traders designed to democratize the capital allocation process;
• LumoXchange of Atlanta, a low-cost remittance marketplace to compare exchange rates in countries across the world and send money online using local foreign exchange rates;
• Hexanika of New York City, which offers a regulatory compliance and reporting system that provides data abstraction, normalization and transformation from disparate systems within a bank;
• Monotto of Atlanta, which offers a personal finance solution that automates the process of saving and investing and is designed for college students;
• Mortgage Peer Network of North Little Rock, which allows institutions to contribute anonymous data to measure performance against peers, monitor customer service and generate leads through social media marketing;
• and PFITR of St. Louis, which offers bond and fixed income pricing, analytics, compliance and controls for public funds investors and other investors.
The companies will receive a $50,000 initial investment for a 6 percent equity position, with up to $300,000 in additional investment possible. An investor demo day will be held Aug. 3 at the Clinton Presidential Library.
The accelerator’s goal is to help the startups gain at least $1 million in annual recurring revenue.
But VC FinTech Managing Director Gary Dowdy, a former Cardinal Health executive, told Arkansas Business in April that some of the firms chosen for the accelerator were more established and the 6 percent equity deal didn't work for them.
He said then that the program offers those a simple agreement for future equity, meaning companies "let us decide what (they're) worth on the pretense of knowing that (they're) going to raise more money in the future." So the percentage bought by the $50,000 would be determined based on how much the company is worth after completing the accelerator, although there would be additional negotiable provisions.
The accelerator's leadership team also includes:
• James Hendren – Venture Center chairman, co-founder of Arkansas Systems and co-founder of Accelerate Arkansas;
• Lee Watson – Venture Center founder, president, CEO and leader of Startup Arkansas;
• Brian Bauer, the accelerator's operations lead and a former aviation operations manager and helicopter crew member who supported special operations missions in Iraq with the Navy;
• Tariq Bokhari, FIS' head of innovation and investments;
• Chris Cline – FIS' senior vice president of channels and digital access for large financial institutions and a senior FIS executive on its Little Rock campus;
• and Collins Andrews – FIS' executive-in-residence for the accelerator and a former senior Systematics/Alltel executive.
Watson said the VC FinTech Accelerator is the only program in the world that has a partnership with a company like FIS.
Gary Norcross, chief executive officer of FIS, said, "When you look at a company like FIS generating more than $9 billion in revenue, it really is about where is the next innovation going to come from…We're thrilled to be a part of this."
Norcross said he believed accelerators would be a key component in encouraging the innovation necessary to compete, and added that Arkansas must to live up to its proud history as one of the biggest innovators in the financial services industry.
Lt. Gov. Tim Griffin and Little Rock Mayor Mark Stodola also spoke at Monday's announcement.
"What you've done here, your team, is just unbelievable, incredible," Griffin said, referring to Watson and the Venture Center. "And the great news is we don't have to get these folks to promise to stay in Arkansas because it's such an amazing place they're never going to want to leave."
He also encouraged the group to call his office if they encounter obstacles to innovation.
"I may not [be able to] fix it, but they do give me a microphone a lot, and I can scream about it," Griffin said.
Stodola said, "To be able to take this ecosystem and to pair it with one of the top companies in the world in financial services is really a special treat…We want at least five, six, seven, eight, maybe even 10 new ideas to come out of this."
Also Monday, Watson announced that the Venture Center finished its second year this week.
He said the center has held hundreds of programs, engaged thousands of entrepreneurs and developers, put 48 teams through its pre-accelerator and trained 56 mentors.
Watson said, when it launched, the center was working with seven startups. That number has risen to more than 100, he said.