As fintech funding slows, startups head to accelerators | Payment source

In a challenging time for young fintechs, it is important to find income as quickly and easily as possible. Mick Oppy says it is a great help to have many prospects in one place.

“As big as banking is in the U.S., it’s still extremely relational,” said Oppy, CEO of Neural Payments, a P2P remittance company. “You can’t just send an email or do a campaign to generate a conversation.”

Neural was part of Demo Day, the finale of the latest FIS Fintech Accelerator program, which helps payment technology developers start or grow their businesses through mentoring, training and connections to industry partners. Payments companies that support shared development say accelerators enable fledgling companies to learn recession-survival and connect with partners.

“The current challenges in the global economy are putting significant pressure on startups, social enterprises and small businesses, which will struggle to survive without adequate support,” said Brian O’Malley, head of sustainability at Adyen, which is expanding its accelerator program. Accelerator programs have a critical role to play here, because mentorship and capital have the potential to make a real difference to a company’s ambitions.”

Neural Payments was founded in 2019, and Oppy said it would begin offering its remittance app at scale in 2021. Neural in 2022 raised about $8 million in Series A funding from Mendon Venture Partners and other investors. It also raised an undisclosed amount from FIS Venture Partners, which runs the FIS Fintech Accelerator.

Beyond access to venture capital, the social aspect of the accelerator program allowed Neural to engage with fintech professionals from FIS and other companies.

“It was critical to connect with all of these professionals,” Oppy said. “I couldn’t tell you how many leads I had in front of me, but I generated more than enough work for our sales team to follow up.”

Neural, which is positioning itself as an alternative to the bank-led Zelle P2P service, will use those leads and capital to chart its next steps. One goal is to put financial services on top of transfers.

“Our engine can do more than P2P, and we’re looking to start conversations around the next product and the next use cases,” Oppy said.

Other companies in FIS’s accelerator included Connect Earth, a green banking fintech; Equipifi, a buy-now/pay-later lender; Sardine, an ACH money movement and crypto risk company; and Sygno, a fraud monitoring firm; among others.

The 16-week program took place at the FIS Development Center in Little Rock, Arkansas, with Demo Day at the FIS offices in Jacksonville, Florida. There is also a virtual demo day and a mix of in-person and external programs.

This year’s program took place amid a challenging environment for fintechs and the industry as a whole. Many technology companies have seen theirs valuations fall, while others have cut staff. FIS itself undergoes one strategic review which seeks to improve performance in 2023.

“As we entered the second half of 2022, valuations have put pressure on fintech capital,” said Elaine Duff, senior vice president at FIS Impact Ventures.

The accelerator considers the macroeconomic environment when working with new payment technology companies. The mentorship and instruction includes tips on how to navigate an economic downturn and respond to a more difficult fundraising environment for firms created primarily after the 2008 financial crisis.

“Capital raising is more challenging, so we spend more time helping businesses understand their burn rate and other factors that may affect their cash position,” Duff said. “It’s a different market, and we want to guide the companies to success.”

Other companies also update their programs for developers and entrepreneurs. Barclays, for example, is planning a special edition of the Rise Startup Academy, connecting developers and founders with fintech experts for mentorship.

Accenture operates the Fintech Lab New York. The program is designed to help early-stage technology companies connect with financial services firms and venture capital investors in a centralized location to accelerate their companies’ launch. And TechStars New York recently ran a 13-week program for developers in November, in which Collectiv, a London-based provider of group payment apps, participated.

In a previous interviewPete Casson, chief technology officer and co-founder of Collectiv, said the “American experience” of tech development is “very social,” adding “starting a business is very lonely.”

Dutch payment technology company and processor Adyen is launching four accelerator programs in 2023 following the 2022 Europe/Middle East/Africa edition. The new programs will be in Chicago, Amsterdam, São Paulo, Amsterdam and Dubai.

The new accelerators come as Adyen plans its own expansion, adding small business credit and new point-of-sale technology in Europe, North America and Latin America.

“These locations were chosen for their wealth of budding social enterprises and the importance of the local markets to Adyen’s international growth,” O’Malley said. “An accelerator’s impact can help companies internationalize sales, further product development or improve sustainability.”