Fintech incubator and co-working space launches in Redwood City

https://bankinnovation.net/2019/06/fintech-incubator-and-co-working-space-launches-in-redwood-city/
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A fintech incubator called Silicon Fintech Bay is launching in Redwood City, California.

CEO Rick Frisbie declined to say what areas the incubator will focus on, but he told Bank Innovation that selected companies will get to work with the program’s partners on problems they’ve identified. “We don’t want to go willy nilly and find a bunch of startup residents that don’t really apply to what they’re trying to solve,” he said.

Silicon Fintech Bay’s partners include Franklin Templeton Investments, Japanese tech company Fujitsu, investment management company Principal and Flagstar Bank. Parent company Fintech Consortium doesn’t take equity in the startups, but it does charge monthly rent: $400 for an open desk, $800 for a “permanent desk” and $1,200 for a private office.

Silicon FinTech Bay is the latest incubator from Fintech Consortium. Singapore FinTech Bay launched three years ago and, according to Frisbie, has since graduated 600 companies globally, including blockchain builder Settlemint and the artificial intelligence platform Taiger. Bahrain FinTech Bay launched 14 months ago and has graduated about 50 companies, including the dual language AI chatbot tool Labiba and the digital currency company Rain Financial, he noted.

Despite Fintech Consortium’s global reach, it enters a crowded space of fintech incubators and accelerators vying for the attention of startups, including Bank Innovation sister accelerator INV Fintech, Techstars and startup programs led by banks and other financial services companies.

Sean Wise, a professor of entrepreneurship and innovation at Toronto-based Ryerson University, told Bank Innovation that Silicon FinTech Bay’s model of generating revenue based on rent instead of equity has some advantages. “Doing so underwrites operating costs, creates a vested interest in startup success and ensures access to key early customers segments,” he said in an email.

The challenge for early-stage companies is to cover the overhead costs without a clear idea of the return on investment. Charging rent for the space is essentially charging startups for access to the sponsors, and Wise said a healthier model would be to invest money in the startup and take equity.

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https://bankinnovation.net/2019/06/fintech-incubator-and-co-working-space-launches-in-redwood-city/