BOSTON — Last year, the DCU Center of Excellence in Financial Services, in partnership with Workbar, gifted four Fintech startups with mentorship, networking, office space and a platform to beta test respective innovations. Now seven new companies hope to achieve the success levels attained by their predecessors.
"All four companies from the first year are at various stages of development, but they all have a customer base," said David Araujo, vice president of Information Systems at Digital Federal Credit Union (DCU) and director of the DCU Center of Excellence in Financial Services (DCU CoE).
"Some of them raised capital and others didn't have to raise capital. In an eight-month period, all companies added staff — some doubled their staff," said Araujo adding that this is the second year the $700 million DCU is offering the free platform in conjunction with the Boston-based co-working company, Workbar.
The four Boston-based companies Araujo referred to are: Elsen, Stock Rover, Blueleaf and Trotter (formerly Socrex). Elsen, a platform for investors, for example, raised $400,000 in early 2015. The company's CEO and Founder Zac Sheffer said that he applied to the program to "learn from seasoned professionals at DCU and have a chance to connect with peer startups for ideas and inspiration."
Araujo echoes Sheffer's comment adding that DCU CoE's goal, conceived by a 12-person DCU leadership team, is simple: to encourage innovation in Boston's financial marketplace. Whereas the credit union, with 950 employees and 22 branches, has considerable resources, its partnership with Workbar provides the opportunity to tap into new talent streams.
"All these companies are co-located here and have person-to-person interaction," said Workbar's Director of Business Development Devin Cole. He adds that the company has more than 800 members working in various industries at two city locations.
"Workbar helps us market the space because they are tightly integrated in the city of Boston," said Araujo who added that participating companies have 24/7 Workbar access, free wifi, free coffee, conference and phone rooms and dedicated seating.
Seven Innovators
For DCU CoE's second year, there was a concerted effort to include companies that are developing broader innovations for the financial services industry, including mobile payments and technology, lending and financial education.
This year's roster includes: AlphaPack, which helps individuals design data-driven investment portfolios; Arbitrage Ed, which creates financial education for individuals to freely learn about personal finance and investing; Bullseye, a mobile application that allows members to evaluate investment opportunities with employees they trust; Collective Capital, a real estate investment firm that raises capital via the Internet for real estate deals previously analyzed and vetted by proprietary algorithms; CurrencyDoc, which issues multi-currency prepaid cards powered by a mobile app; Katapal, which assists small and medium size businesses to raise capital and attract new customers; and QuantUniversity, an analytics advisory that provides strategic solutions and executive education to build business quantitative models.
"The companies that are coming to us already have an idea or are in the development stage," said Araujo. He noted that applications for the fall are being accepted through Aug. 15.
"An interesting aspect to this program is that all these startups are entrenched in Boston's entrepreneurial community, so they communicate on a regular basis without DCU interaction," said Araujo. "There are issues every startup has to deal with that isn't product specific, but organizational specific."
As is the case with all new initiatives, lessons were learned during DCU CoE's inaugural year, including the realization that the entrepreneurs required a more efficient manner in which to interact with DCU executives.
"This year, we're putting special emphasis on relationship building with relevant department heads within DCU so that startups will find maximum value," said Araujo. "We are trying to understand where they are at in the process and what we can do to help. Whether it is a regulatory question, a compliance question or lending question, we will connect them with the right people."
When the seven companies complete the program in December, they will have the opportunity to present their respective product offerings in hopes of growing business models.
"They will demo their product for the industry and the public as well," said Cole who added that neither DCU CoE nor Workbar has a financial stake in any company that is in the incubator. "We want to make sure these companies have visibility in the community."
