The Rise of Location-Agnostic Fintech Accelerators

accelerator

The conventional Accelerator model, pioneered by Y Combinator, is tied to a specific location. Ventures come to a place for 3-6 months to get ready to launch to the outside world. We are now seeing a new breed of location-agnostic Fintech Accelerators. They don’t mind where the venture originates from and don’t insist on relocation. They have Mentors, just like regular Accelerators, but they connect them to ventures in digital venues rather than physical venues.

The traditional Accelerator is more like a campus. The students (entrepreneurs, usually first time entrepreneurs) gather in one place to learn from their peers and from experienced mentors. For many teams, this is the first time they have the luxury of working together in a physical location with all the usual trappings and social interaction and serendipitous learning that takes place when you cluster smart, driven people together.

The location-agnostic Accelerators are based in a physical location but they don’t insist that the ventures move to that location. Families of the entrepreneurs will be relieved – their loved ones don’t leave to go to San Francisco or London or New York. This location-agnostic focus makes sense for four reasons:

  • Local Fin Market. Some FinTech ventures target a specific geographic market/jurisdiction. FinTech is different because “bits don’t stop at borders but money has to show its passport”. To a FinTech that wants to be regulated as a Fin, this matters. Regulation varies by country. Some ventures do well in FinTech by winning in a specific country and then being acquired by a global company that wants to accelerate entry to that market. These local market entrepreneurs want global expertise, but may want to stay rooted in their local market.
  • Local R&D & global marketing. Some more Tech oriented ventures that don’t worry about Fin regulation, may want to tap into great local R&D resources while being able to access global markets. Israeli ventures pioneered this model and others are now copying this.
  • Cost. Not all Tech entrepreneurs can move to San Francisco, London or New York. It would simply become too expensive; many will tell you that this is already true. As we enter a tougher environment for early stage fund raising, the capital efficiency of ventures matters. Translation: don’t assume a mega Series A will solve all your problems.
  • Lifestyle. Even if you have raised enough to move to San Francisco, London or New York, you might not want to because you like where you live.

Stretching the analogy, a location-agnostic Accelerator is like an online college vs a physical campus. Distance learning and distance collaboration is harder. It remains to be seen whether location-agnostic Acceleratorscan make the model work.

The two location-agnostic Fintech Accelerators that we spotted are:

  • NexusSquared is based in Zurich, but the two founders (Daniel Gasteiger and Daniel Grassinger) recognized early on that Zurich is too expensive for a traditional campus based approach. Their focus is Blockchain technology applied to capital markets. This makes sense because Zurich has great capital markets and now in nearby Zug there is a lot of crypto expertise that has got the label Crypto Valley. This Zurich Zug corridor is worth watching.
  • Bank Innovation INV is based in New York. It has evolved from a media business (which syndicates content from Daily Fintech) run by a talented entrepreneur named JJ Hornblass, who I caught up with last week on my trip to my old stamping grounds in New York. They will take ventures from anywhere, but have a particular strength in Israel, which has a strong Fintech culture (which we explored on our Fintech City Tour). It seems odd to write about a Tel Aviv-New York corridor given the distance, but it is real because of human networks across these two places.

Accelerators is a confusing space because it intersects with so many related models:

  • VC Fund. The early pioneers (such as Y Combinator & Techstars) are morphing into VC funds with an attached Accelerator. This tends to move them to later stage, closer to Series A (which is really a growth stage round now).
  • Angel Network. The Mentors attached to an Accelerator are usually also Angel investors.
  • Open Innovation Challenges. Financial Institutions and the Vendors who serve them use Open Innovation Challenges to efficiently source new products that they can either license or acquire. An Accelerator with a single Sponsor is more like an Open Innovation Challenge, although the Barclays Accelerator powered by Techstars is clearly in a different league.
  • Entrepreneur College. Accelerators are like colleges for entrepreneurs but with a different revenue model (equity rather than cash).
  • Pitchathon. If you think you don’t need to go to college, apply to an event such as Finovate where you get to pitch to a group of investors and Financial Institutions (and Consultants and Competitors).

Some time ago we published a list of Fintech Accelerators. That list has grown so much it was time to compile a new one.

 

Fintech Accelerators & Incubators Primary Locations
A. Fintech Specific
Startupbootcamp London, New York, Singapore
Bank Innovation INV   New York
Barclays by Techstars London, New York
H2 Ventures Australia
Coin Apex New York
FinTech Circle London
SWIFT’s Innotribe Incubator Global
FinTech Sandbox Boston
FinLeap  Berlin
Bright Bridge Ventures London
Fintech Innovation Lab London, New York, Hong Kong, Dublin
Fintech Fusion Geneva
Holland FinTech Amsterdam
Ynext Launchpad Silicon Valley
PlugnPlay Fintech Accelerator Silicon Valley
QC FinTech  Charlotte
Six Thirty St Louis
Stone & Chalk Australia
Nexus Squared Zurich
Global Insurance Accelerator Des Moines, USA
Mundi Lab Madrid
Tyro Fintech Hub Australia
Anthemis. London & New York
Value Stream Lab New York
F10 by Six Zurich
UniCredit Start Lab Milan
B. General Purpose with significant Fintech
Georgia Tech USA
iAccelerate (University of Wollongong) Australia
3D FinTech Challenge  France
Level 39 London
Wayra Spain & Latin America
Matchi Hong Kong/Cyberspace
New York Angels New York
Seedcamp London

 

 

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