Thomson, Fidelity, Amazon to Create 'Sandbox' for Fintech Startups
Manilla was a hit with technology critics and had a loyal base of customers, but what it really needed to gain widespread acceptance was a bank partner.
BitPay, which processes payments for merchants in the virtual currency Bitcoin, has attracted some investors with a pedigree in pioneering alternative ways to send and receive money (PayPal).
Thomson Reuters, Fidelity Investments and Amazon.com are jointly launching a program called Fintech Sandbox to support technology startups aiming to serve the financial services industry.
What makes Fintech Sandbox different is that it is not "a shark." It is incorporated as a nonprofit. Hence, according to media reports, instead of offering the up and coming entrepreneurs financing, Fintech will provide free or discounted datasets they can use to build their applications and demonstrate their products.
"Fintech entrepreneurs have a unique problem, which is the high cost of data to help them build applications," David Jegen, managing director of Devonshire Investors, the private investment arm of the Johnson family, which controls Fidelity, told the Boston Globe. "They raise $2 million of venture capital funding, and then spend $500,000 of it buying market data from Bloomberg or Thomson Reuters. Or they show up to customers, who say, 'Nice app, but it hasn't been tested on robust data sets. We think that is a problem we can help solve."
The Fintech Sandbox will be supervised by Rocky Weitz, the former chief executive and cofounder of Boston startup CargoMetrics.
The nonprofit will help selected startups access financial information and sample data sets provided by the founders and other supporters and sources. For example, Amazon's Web Services division will supply data processing and storage services.
The Fintech Sandbox is expected to officially open later this year in Boston, where it will offer entrepreneurs a place to meet, network or attend educational events.