Delaware has been a financial business technology hub for years, but it’s projects like Fintech CAFE that are putting the state on the map as a place for fintech entrepreneurs.
After a successful first cohort this spring, the Fintech CAFE accelerator returns for the fall. It gives fintech startups in financial stocks the opportunity to apply for the 8-week hybrid program based in FinTech Innovation Center at the University of Delaware’s STAR campus in Newark. For the latest cohort, the program provided an opportunity to see what Delaware offers, both in terms of the fintech industry and for young companies in general, as well as to grow their startups, said the founders of the cohort at Technical.ly.
Fintech CAFE, now sponsored by North Wilmington fintech company Best eggseeks startups in Delaware and beyond with a mission to make financial products, from access to loans to financial education tools, more accessible to people and communities historically underserved by the financial industry.
Applications are open on August 5 and will remain open until September 2, with the program starting the week of October 8. There is no cost to participants and no geographic restrictions, although it does require participants to attend three days in person in Newark. , Delaware the first week and one day for the demo day presentation at the end.
New York fintech leader and entrepreneur Kristin Castell developed Fintech CAFE and chose the Fintech Innovation Hub as the program’s base in 2023. The first cohort launched in March with six startups: Muse Tax, NESTER, Parlay, Stratyfy, Sunny Day Fund and Wellthi — selected from 60 applicants.
So, what types of startups are best suited for Fintech CAFE? Three of the six inaugural cohorts have shared their Fintech Café missions and experiences as the program continues with Cohort #2.
External founders can learn the inner workings of Delaware while gaining greater access to capital
Jay Long, co-founder of Parlay, a capital access app startup based in Alexandria, Virginia, felt the benefits of what he called Delaware’s critical role in the region, with its central location and proximity to several ecosystems.
“One of the surprising benefits of working with CAFE is that even though we’re in Alexandria, which isn’t too far away, I don’t think we gained as much understanding of the business ecosystems in this space before CAFE.”
Parlay is founded entirely by veterans and military spouses, including CEO Alex McLeod and CTO James Cho. It was launched in 2022 with the goal of helping underserved small business owners access capital.
Since its inception, it has participated in several accelerators, including the Boulder-based global accelerator TechStars.
“We increasingly think of accelerators as different musical instruments in a symphony,” Long told Technical.ly. “On the one hand, they are all instruments, but as you approach them, very different roles apply, there are different points of emphasis and focus.”
CAFE seeks startups with a strong mission behind the technology
Laura Kornhauser, who co-founded another inaugural CAFE fintech startup, Stratyfy, with Dmitry Lesnik, became interested in financial stocks shortly after leaving a good but unfulfilling job at JPMorgan.
She returned to school to update her skills, during which time she received several targeted offers to apply for a credit card. When she finally applied, she was rejected because her income while studying was low.
“It really opened my eyes to how credit decisions are made,” Kornhauser said. “For me, this credit card was not going to change my life. But for some people, and especially mortgages and small business loans, these are the types of credit products that can significantly change a person’s financial future.
New York-based Stratyfy works with financial institutions to help them make credit and risk-based decisions, including with an AI-based product called Unbias that uncovers embedded biases in data sets and deletes system templates.
Stratyfy’s research found, for example, that 13.27% of black applicants (1,100 mortgages) who were denied credit contained nothing in the data that warranted rejection. The platform seeks to reduce this type of rejection based on human bias.
Stratfy’s mission aligns so well with Fintech CAFE that Kornhauser and Lesnik didn’t hesitate to apply after meeting Castell.
“There was an interesting intersection between the financial services that exist in Delaware and the mission alignment,” Kornhauser said.
Delaware-based startup in first cohort now looking to expand nationally
Brendan Kennealey, the only Delaware-based founder in the inaugural cohort, brought his homeowner budgeting platform, NESTER, to Fintech CAFE. NESTER estimates how much a homeowner needs to save monthly to prepare for upcoming home maintenance costs,
Shortly after it was finished, New Castle County Announcement a contract with NESTER that would give all homeowners and homebuyers in the county free access to the tool.
Prior to this contract, Kennealey and his team focused solely on homebuyers, including a 2023 contract with the City of Wilmington that made the platform free to individuals and families participating in the city’s partner homeownership programs. city.
Kennealey is now looking to expand NESTER to other states and municipalities, but will maintain its base in Delaware.
“Delaware has a great setup,” Kenneasley said. “Being a small state, it can be nimble, you can get things done, you have access to everyone in Delaware. Then, of course, the story here of having a lot of financial intellectual capital. This can be a real catalyst for startups.
➡️Read more:
Companies:
University of Delaware