Financial technology startups offered aid
It’s no surprise that Ohio is home to companies that have for years used technology to handle money. Think Huntington Bancshares and Grange Insurance, for example.
Now, efforts are under way to encourage development of new companies that will create the next generation of such systems.
JobsOhio and Huntington, Safelite, Grange Insurance and a young company, auto insurer Root Insurance, are among the participants in what is called Fintech71. The group’s name is taken from Interstate 71, which connects the state’s three biggest cities: Columbus, Cleveland and Cincinnati.
Fintech71 will operate as a so-called accelerator, offering young companies guidance and financial support so they can grow more quickly than they otherwise might.
The companies could develop new ways to pay bills or transfer money from one person to the next, as consumers now can do with
Venmo or Zelle. Or they could take on insurance, as Root has. The local insurer promises low rates, but only good drivers can qualify by applying for coverage with Root’s smartphone app that tracks how they drive.
“Amazing companies could be built and grown in Ohio because of this accelerator,” said Matt Armstead, Fintech71’s executive director. “It gives them a reason to come here.”
Amit Dhingra, Huntington’s managing director of strategy who serves on Fintech71’s board, said, “As we look at this long term, Huntington’s goal is to support Columbus’ and Ohio’s growth by supporting this emerging (financial-technology) hub. Fintech71 is a good resource to contribute to as well as learn from and draw from.”
Other Ohio companies involved include KeyBank, Progressive and Kroger. JPMorgan Chase & Co., central Ohio’s largest private employer, will provide technical and other assistance.
JobsOhio and the partners in the project have provided money meant to jump-start the effort. The amount was not disclosed.
Columbus-based Lumos, a group of entrepreneurs who have experience with accelerators and insurance, banking and payments startups, will run the daily operations. Fintech71 plans to set up shop Downtown soon in space that also will house the participating companies.
Fintech71 will take applications from startups from May 15 to July 15 for a 10-week program that begins in September. Fintech71 said companies outside the U.S. are particularly encouraged to apply, and visa support will be provided for the staffs of those chosen.
As many as 12 companies will participate in the accelerator program. Each will receive a $100,000 investment. In return, Fintech71 will take a 2 to 6 percent ownership stake, provide mentoring and offer technical help.
Armstead said that after the 10-week program, the companies figure to be ready for the next level of
investment.
Financial services have an outsized presence in Ohio. The industry is the secondlargest private-sector share of the state’s economy. Besides Huntington, the region is home to the headquarters of several banks and insurance companies, including Nationwide, State Auto Financial, Grange, Motorists Mutual, Park National Bank and Heartland BancCorp. Online financial-services company Klarna has set up its U.S. headquarters in Columbus.
Huntington executive Dhingra looks at the potential of something like a Venmo or Zelle that could come out of Fintech71. And that company will be based in Ohio, unlike so many startups that are on the West or East coast.
“The nature of the folks competing and wanting to be part of the accelerator are smart, talented individuals with good ideas,” he said. “They need advice and guidance to take their idea to the next level.”