FIS of Jacksonville, Florida, and Gov. Asa Hutchinson announced Wednesday that they aim to extend the VC FinTech Accelerator program until 2018 to the tune of $500,000 each for both years — a total of $2 million to fund the program.
The 12-week summer startup program, hosted at the Venture Center in Little Rock and backed by FIS, held its first Demo Day Wednesday at the Clinton Presidential Library in Little Rock.
Hutchinson was among the event’s speakers and said the state’s portion of the accelerator’s budget would come from discretionary funds.
Hutchinson pitched the state’s backing as “the initial phase” of a proposal he’ll make to the Legislature in January to provide at least $2 million to fund additional accelerators.
The accelerators will incorporate industry-specific and public-private partnerships, and the state will define what return it expects from investments, as well as what criteria accelerators will have to meet to receive funding, the governor said.
Mike Preston, executive director of the Arkansas Economic Development Commission, said the plan to back more accelerators is in its “conceptual phases” right now. He said the state would work with FIS, other companies and members of the entrepreneurial community to develop elements of the program.
“Innovation in financial technology is happening at an incredible pace,” Hutchinson said. “As one of the original homes of FinTech, it was important for Arkansas to continue pushing that innovation. We’re extremely proud that Arkansas and FIS could continue to support this wonderful program.”
FIS is a global banking technology services provider that traces its origins back to Systematics of Little Rock. The company maintains a large campus in west Little Rock that employs roughly 1,300 workers. Globally, it has more than 55,000 employees.
FIS announced the inaugural FinTech program in December. Ten companies participated in the program, each receiving an initial $50,000 investment in exchange for about 6 percent in equity in their companies and access to FIS executives and other financial services industry leaders to hone their respective businesses.
“Arkansas has a proud heritage of starting many technology companies over the years. Actually, Systematics was started here in 1968, has grown into the largest financial services provider in the world today,” FIS CEO Gary Norcross said. “So it’s only natural — as we look for our expansion of innovation around the world — why not come to our starting place, Little Rock, Arkansas?”
While FIS funded the first accelerator, Norcross noted that initial investment isn’t all an accelerator needs. There are other expenses related to facilities, administration and recruiting, he said.
The accelerator’s goal is to help the startups gain at least $1 million in annual recurring revenue by gaining a foothold in the financial services industry with new products and services for financial institutions, payment firms and other segments of the industry.
Economic leaders also hope that companies born in the program will remain in Arkansas, hiring more workers and providing good-paying jobs. Hutchinson told Arkansas Business that AEDC has given presentations to accelerator companies about incentives available to them if they stay in Arkansas, but he declined to say whether any had decided to remain.
Norcross was optimistic about the next two years of the VC FinTech Accelerator, and future accelerators.
“Recruiting early-stage startups and technology to the state is going to be important to job growth in the future,” he said. “I think we’ve proven through our first accelerator that we were successful in the state of Arkansas. We were way oversubscribed for the first one, which was a good thing. We had to weed down the applications on a substantial basis. So we think the future accelerators are going to be equally successful and help drive Arkansas’ agenda for job growth.”
Watch the governor’s address above.