Taking a Look at the Future of Fintech at Citi Accelerator Demo Day

The fourth class of Citi Accelerator Tel Aviv held their demo day to a large audience of investors and potential

Hosting its fourth accelerator class at Citi Innovation Labs in Tel Aviv, the Fintech Accelerator Program presented its demo day yesterday. Demoing their products to media, investors and potential clients were startups from the current class alongside several alumni members.

The demos were part of the overall annual Expo held in the Tel Aviv Innovation Lab.  In addition to startups, Citi showcased several facets of their internal technology being developed in the Israel based R&D Innovation Lab, which included solutions for monitoring proprietary risk to prevent a Knight Trading flash crash type of event, digital security and cloud hosting.

Among the startups there were two in particular- CrediGence and PayZ- that I believe to be in the right place at the right time, potentially well positioned for a huge demand cycle for their products. One of the criticisms regarding the fintech sector is the long sales process that startups (and truthfully even public firms) endure when marketing their wares to banks and other traditional financial firms. As an alternative, many fintech firms are embracing models such as marketplace lending and payment transfers whereby they target the consumer directly, instead of selling products to banks.

citi demo dayNonetheless, traditional firms like banks, brokers, insurance and asset management companies are showing demand for digital solutions; but the integration process can be a drawn out process. However, one area that does appear to be a sweet spot in the market are small and medium sized firms that want to utilize technology that increases efficiency both internally and for their customers. On a cost basis, it makes more sense for many of these firms to outsource the service rather than develop it in-house.

In this regard, CrediGence is developing a digital platform for banks and lenders to handle the loan application process from their small and medium sized business (SMB) customers. Earlier in the week we covered online lender Biz2Credit which had signed a deal to license their loan servicing platform to Customer Bank. For small and mid-sized banks, these lending platforms provide an opportunity for them to expedite the loan application process by automating portions of it. Also with online lending becoming a hot sector due to the emergence of marketplace lenders that are increasing competition, licensed solutions for banks can help them better compete against lending startups.

Elsewhere, Artopay has developed a solution called Payz to help consumers decide which is the best credit card to use in different stores or online sites. The product is aimed at the US market where the average person has numerous credit or debit cards. With Payz, a user could theoretically know if a retailer is offering a discount or extra miles when using a specific card.

Similar to other consumer finance apps that have found success in the US, Payz is offering the product for free to consumers and using a consumer to business to consumer loop. The business model works in a loop- consumers benefit from more businesses on board that are providing incentives to them, and businesses in turn attract customers with said incentives. With lots of interest among consumers for comparison shopping apps as well businesses starting to adopt the idea of using location and transaction habits to market to customers, Payz appears to be well positioned to catch this trend.

Leav Graves, Founder, OptionSamurai
Leav Graves, Founder, OptionSamurai

Elsehwhere among the startups, there were three firms that may be familiar to Finance Magnates readers, they were PolyCoin, GetGems and OptionSamurai. Covered last week, PolyCoin has developed a compliance tool for helping to verify bitcoin and other blockchain based currency transfers. Also in the digital currency space, GetGems is using the blockchain to power payment transfers via social and messaging platforms like WhatsApp and Facebook. Having created an option trading platform for retail investors, OptionSamurai demoed their latest development; a back tester and strategy signal provider for options.

Other startups included:
Kensee: Developing what they call the ‘Bloomberg of Real Estate’, Kensee is an analytics platforms for evaluating historical and present trends in the real estate sector. With property crowdfunding platforms widening the array of real estate investors as well as large funds targeting alternative asset classes due to low global interest rates, Kensee could provide value to analysts in this sector.

Provenance Investment Management: The firm has created an algorithm for managing funds based on analyzing inflows of mutual funds. In addition to using their technology to manage a proprietary account, they are developing solutions for licensing their buy/sell recommendations to third party funds.

Rewire: This is a firm that seemed interesting as they are providing remittance services by partnering with existing financial firms in countries such as Thailand and the Philippines. The founders explained that their main value compared to other fintech startups in the remittance field is that they can accept real cash transfers instead of being limited to bank transfers for funding accounts. Operating in Israel, they have their eyes on expanding to Europe.

WorkCapital: They created a factoring platform for merchants to receive loans based on selling their invoices. Currently operating in Brazil, the firm is aiming to distinguish themselves from other similar companies by also providing merchants risk analysis tools.

Epistema: Created a big data analytics tool to help financial firms better understand their operations. Rather than calculating results based on analyzing all inputs together, Epistema collects information from numerous company analysts. The solution then compares the numerous inputs to extract ‘hidden’ data that may not be apparent when reviewing information as a single unit.

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