Atlanta’s burgeoning financial technology ecosystem lured a fintech startup away from New York City’s financial district.
Tern, a banking-as-a-service company, will officially make the Atlanta Tech Village its headquarters on Jan. 1, 2023. It spent nearly seven years in Manhattan's Underwood Building.
Workforce was the biggest factor in choosing Atlanta, said Brion Bonkowski, the company's CEO and founder. The city has more of Tern's employees than anywhere else and wages are substantially cheaper than in New York City. The company also considered moving to Miami and Montana.
George Stamps, Tern's chief compliance officer, also credited the State of Georgia's responsiveness — a key for the highly regulated fintech industry.
“For the secretary of state's office in Georgia, you can pick up the phone and call them directly, and you'll get someone on the line if you want to get a certificate of good standing, if you have a tax question, or a regulation question,” Stamps said.
Tern, founded in 2015, is the latest financial service company to relocate or establish a headquarters in Atlanta, adding to its "Transaction Alley" nickname. In August, Splitit moved here from New York City before raising $10.5 million. In March 2021, London-based fintech startup Capital on Tap established a U.S. headquarters in Atlanta.
Startups in the local fintech ecosystem have a history of scaling rapidly, sometimes achieving a $1 billion valuation. Georgia has over 200 fintech businesses that generate $72 billion in annual revenue.
What to know about Tern
Tern lets businesses launch fintech products such as prepaid cards, debit cards or personalized cards so they can send or receive funds. Bonkowski, who also co-founded Virginia-based financial management company GrantVantage Inc. and is a board member of New York financial service company ROIPayments, said Tern can do this faster than others that provide this service.
Tern has less than 50 employees, one-third of which are based in Atlanta. The company has about 30 customers, which it looks to grow to over 100 by end of next year, Stamps said. Annual revenue has grown 300% in the last few years, he said.
The company sees growing demand from small to medium-sized companies looking to compete with large businesses that provide their own financial service products. A growing number of companies, such as Uber Technologies Inc. (NYSE: UBER) and Amazon.com Inc. (NASDAQ: AMZN), offer their own debit cards for workers and customers to access funds and get cash-back rewards.
“There’s an adage going around in the venture world that every company will become a fintech,” Bonkowski said. “People are becoming accustomed to using [fintech] services and smaller companies want to take advantage of this new swath of services for their own.”
