BRIDGING THE GAP SteelBridge Labs early out of the gate for fintech startup help
Pittsburgh Post-Gazette
Early next year, SteelBridge Laboratories, an early stage financial technology incubator, will move into new digs in the Strip District, a harbinger of an industry that one expert says is suddenly getting traction.
SteelBridge Labs, formed in April, provides support and seed funding up to $250,000 for financial software startups. Three companies have signed up for space in SteelBridge’s three-story 6,000-square-foot building being renovated on Smallman Street, said cofounder and managing partner James Haluszczak.
Getting ready to set up shop in the renovated building, which dates from 1893, is Connex Business Engine, a software platform that’s designed to allow new businesses to ramp up quickly; ExchangeLodge, private capital business management software; and IraLogix, individual retirement account recordkeeping software for employers.
The building can accommodate two more startups. SteelBridge is looking for complementary enterprises, a new marketing outfit, for example, which could help existing tenants.
“Our goal is to make an impact and create jobs,” the 39year-old Mr. Haluszczak said. “Incubators — there are lots of them out there. You can find angel investors. But they can’t give you the horsepower in terms of execution that SteelBridge Labs can provide.”
Pittsburgh has a variety of incubators and co-working space for budding companies, including the newest, Alloy 26, a 50,000-square-foot space inside a one-time shopping mall on the North Side. Innovation Works, the biggest and most active seed investor in the region, also operates the Alphalab complex in East Liberty, where “classes” of new entrepreneurs get working space and help in growing their companies through intensive counseling from private sector executives and others.
But SteelBridge caters to financial software startups, a niche service provider in the startup world. What’s more, financial technology — or fintech — startups have been getting traction, said Susan Altman, a lawyer and partner at the downtown offices of K&L Gates.
“Fintech is exploding,” said Ms. Altman, who specializes in fintech, mergers and acquisitions and other issues.
Financial technology’s day in the sun comes courtesy of the advancements in artificial intelligence and big data not available a decade ago, Ms. Altman said.
Fintech investment in the first quarter totaled $5.3 billion nationwide, a 67 percent increase from the same three months a year ago, according to Om Kundu, Inspirave LLC’s chairman and CEO. Downtown-based online savings startup Inspirave helps consumers put money aside for big purchases.
Mr. Kundu said fintech is among the most active areas for new venture investment. Nationwide, the number of fintech startups exceeded 2,000, which compared to 800 in April 2015, according to a February analysis by management consultant firm McKinsey & Co.
Globally, fintechs catering to the staid banking industry have benefited from nearly $23
billion of venture capital and growth equity during the past five years, with $12.2 billion deployed in 2014 alone, McKinsey found. SteelBridge’s Smallman Street incubator will be among the first of its kind in the region.
“It’s certainly welcomed,” Mr. Kundu said about SteelBridge’s arrival in the Strip.
The result of having the program: Getting financial technology products and services to market should be faster than it would be without the incubator, Mr. Haluszczak said.
Think “entrepreneur” and one may imagine a young Steve Jobs co-founding Apple at age 21, but Mr. Haluszczak says seasoned executives are also getting into the act, sometimes former financial industry executives who bring a lower appetite for risk than the 20-something entrepreneur working out of his garage.
IraLogix’s 57-year-old CEO David Bernard said he appreciated SteelBridge’s help.
“It has helped us immensely,” he said, “giving us a comfort level” in meeting with potential clients and investors. “They brought in a lot of technology to help us build out our platform.”
“They’re actually building some of it for us.”
IraLogix, which tracks retirement fund accounts for employers, was founded 18 months ago and employs eight people. Thanks to the fast start up, the company anticipates tripling its workforce in early 2017 as new technology platforms become available, he said.
“This has been a great opportunity,” he said.