Fintech is disruptive by nature, so it was only a matter of time before this feisty category disrupted itself. A network of geographic locations, each with its own unique strengths, is quietly merging with Silicon Valley to form a fintech accelerator matrix that’s replacing the old single location fintech hub.
Miami, Atlanta, Austin, Omaha and Washington, DC are all attracting large numbers of startups. Miami alone has seen a 63% increase over the past two years. This trend was predicted by Bank Innovation when they reported, “These cities boast strong tech communities and talent pools, good coffee, and cheaper rent.”
Miami, the largest city in the South Florida metro area, benefits from four key resources:
- Business-friendly political environment
- Technology talent pool
- Incubators and investors
- Close to Latin America.
The number of startups launching in South Florida has increased by 63% in 2 short years. This is due in part to its user-friendly business environment. The state reduced their corporate tax rate to 5.5%, and streamlined the regulatory environment. It’s faster and easier to get a new venture off the ground, and the cost of doing business is low compared to other states.
Technology Talent Pool
Talent is an added bonus. Greater Miami is now the eighth largest metro area in the US with a combined population that’s just over 6 million. South Florida attracts an impressive pool of creative young techies with its mild weather, zero state personal income tax, diverse mix of cultures, assortment of state parks and beaches, vibrant nightlife and reasonable rents.
Incubators and Investors
Startups will find plenty of support from incubators and investors in South Florida.
TheVentureCity (TVC), an ecosystem accelerator for tech startups with international potential, recently launched a $100 Million Global Fund for Tech Startups. Laura Gonzalez-Estefani, the founder and CEO, says funding is only one part of their mission, “TheVentureCity aims to…scale startups on a global level through its consultancy, its acceleration programs and in-house product and engineering expertise.” Startups looking for an incubator experience can choose to partner with TVC or VentureHive, a 12-week accelerator program focused on technology.
500 Startups is another VC and mentor all in one. They’re on a mission to discover and back the world’s most talented entrepreneurs, help them create successful companies at scale, and build thriving global ecosystems. Christine Tsai, the CEO, was recently quoted, “We believe Miami is a key market for us to double down on and continue to serve all three parts of our mission.” Since its inception in 2010, 500 Startups has invested in more than 2,000 companies across 60 countries, and they’ve mentored thousands of entrepreneurs.
Close to Latin America
Miami is strategically positioned at the northern tip of Central and South America with convenient access via multiple international airports. This southern location combined with a dynamic international banking community makes it the natural choice for partnerships with companies in Latin America.
Ray Ruga the founder of Fintech Americas tells us, “Miami as a financial center for the Americas is an ideal location for developing fintech.” He goes on to say, “The Americas continues to be an under-appreciated opportunity. All of the elements are in place…50% of the population is unbanked, $1.6 trillion GDP, 550 million people, 70% smartphone adoption.”
Serge Elkiner the CEO of YellowPepper reinforces this position, “If you work with Latin America, then Miami is definitely the key geographical location…all of the regional headquarters for every large bank, VISA, Mastercard, Amex, everything is in Miami.”
Fintech Superstars Miami
The Miami Herald recently published an in-depth analysis on the South Florida technology community, including profiles on several fintech startups that call Miami home:
- PsychSignal uses a natural language analytic engine to convert social media signals into quantitative predictive intelligence for hedge fund managers.
- NovoPayment helps banks, retailers, and travelers bypass payment bottlenecks common in Latin America, by enabling digital alternatives to cash and credit card payments. They have 280 employees in five countries with plans to expand into Chile.
- ClassWallet streamlines payments and reimbursements for teachers and school systems with a virtual wallet that maneuvers complex municipal procurement and payables systems. This is Jamie Rosenberg’s second educational platform. He also launched AdoptAClassroom.org, which was the first crowdfunding platform supporting education.
- YellowPepper makes mobile buying and banking fast, convenient and safe. Their cutting edge Yepex platform digitizes traditional banking services, turning your smartphone into a go everywhere financial tool. They enjoy a strong presence in Mexico, Colombia, Ecuador and Peru. And their sustained growth has garnered $34 million venture funding from fintech investors.
The Only Constant Is Change
Technology is changing the way we do business in the 21st century. Community may be replacing the lone wolf, but we don’t believe Silicon Valley will be replaced by a new single location fintech hub. We do envision a variety of resource-rich locations merging with Silicon Valley to form an accelerator matrix that will continue to evolve over time.
Orlando may be emerging as the latest member to join the matrix. Robinhood, the Silicon Valley investor app, recently opened a regional headquarters in this central Florida city. The 14,500 square foot facility will house their brokerage and support centers with 200 new employees. According to Nate Rodland, the COO, “We were drawn primarily to the city’s talented, diverse workforce.”
Please don’t hesitate to reach out for a pre-launch fintech compliance review.
InnReg is a team of over 30 Regulatory Compliance and Innovation Consulting experts helping fintechs succeed in highly regulated markets since 2013. InnReg specializes on mitigating regulatory risk while helping clients launch and grow innovative fintech products and services.