Franklin Templeton grooms startups to address pain points

Franklin Templeton's headquarters in San Mateo

Franklin Templeton is taking a hands-on approach to cultivating startup talent. The San Mateo, Calif.-based investment company launched a startup incubator on Monday, a program through which companies will be matched with Franklin Templeton mentors and work on business ideas relevant to the objectives of Franklin Templeton and its partners.

According to Joe Boerio, Franklin Templeton’s chief technology officer, the company is looking for startups to help with investment management and data science; client experience; product and distribution; and middle- and back-office operations. He noted  that the program is part of the company’s fintech innovation strategy, beyond other startup accelerators in which it’s participated.

While Franklin Templeton will be intimately involved in advising startups, it’s using a partner organization called EvoNexus to run day-to-day operations. Startups in the incubator complete two years of residency. EvoNexus, a nonprofit, mentors the companies, helps them raise funds and develops more complete business models. To enter the incubator, startups must give EvoNexus a 1% equity stake in the company to support the nonprofit. EvoNexus’ also pulls in external mentors from such companies as Qualcomm, Illumina and Tellient.

Franklin Templeton provides the startups with $150,000 in seed funding, and it takes equity. Boerio said the amount of equity depends on the startup, but it’s typically around 2%. In addition to mentoring, Franklin Templeton can connect startups with technology vendors that are interested in new innovations, he noted. The incubator features collaborative workspaces and demonstration rooms.

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EvoNexus has incubated a number of companies that have been acquired in the past. Point-of-sale financing company LoanHero, for example, was acquired by LendingPoint in 2018. The digital mortgage company Approved, meanwhile, was acquired by Credit Karma in 2018. Franklin Templeton and EvoNexus are targeting companies that work in a number of different fields, including investment management data science, automated digital advice, risk, portfolio construction and compliance management. 

The incubator isn’t Franklin Templeton’s first foray into startup programs. The company has worked with the Boston-based FinTech Sandbox, as well as EvoNexus incubators in San Diego and Orange County. Franklin Templeton also is a partner of the Silicon Fintech Bay program based in Redwood City, Calif. 

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