Over the past few years, Boston has undoubtedly become an emerging hub for financial technology companies.
"Outside of payments, there weren’t a lot of [fintech] startups going on between 2007 and 2012. But since then, in the last five years, we started to see a resurgence," Shereen Shermak, a local angel investor and venture capitalist, told BostInno for Monday's State of Fintech report.
There are a number of things feeding into Boston's fintech scene, including large financial institutions such as Fidelity Investments, State Street and MassMutual, as well as a few big exits, including Samsung's $250 million acquisition of LoopPay and PayPal's $280 million purchase of Paydiant. There are also emerging technologies fueling Boston fintech, like machine learning and blockchain.
While many Boston fintech startups are focused on the enterprise side, there are a number of companies that are consumer-oriented, including Circle, Insurify, Quilt and RateGravity.
From international payments and easier ways to buy insurance to student loan payments as an employee benefit, these 14 fintech startups in Boston have been making some big moves recently.
Bison
Bison, which stands for Boston Illiquid Securities Offering Network, provides private equity firms and their investors with analytics software to assess investment relationships. Last fall, the startup raised a Series A financing round led by Hamilton Lane, a private markets asset management firm that helped develop Bison's new software platform, Cobalt. Bison's Cobalt GP software helps private equity firms build relationships with investors while Cobalt LP gives investors better transparency into things like portfolio construction, due dilligence and decision-making.
Cinch
Founded and led by financial services veteran Sean Collins, Cinch Financial has been likened to a "Waze for personal finance," giving people step-by-step recommendations on personal finance through a mobile interface. Collins told Xconomy earlier this year that Cinch plans to automatically handle transactions, such as moving money into a savings account or switching to a cheaper auto insurance policy. The startup, which is accepting sign-ups now, has raised nearly $10 million from a single, unnamed investor.
Circle
Founded and led by Brightcove co-founder Jeremy Allaire and Sean Neville, Circle makes a peer-to-peer mobile payments app that is powered by blockchain's digital ledger technology. As we reported in our new profile of Circle, the startup has raised $136 million from investors, including Goldman Sachs and a number of Chinese investors. The company's goal is to make international payments work in the same way as messaging a friend — fast, easy and free. Circle's user base grew 300 percent in the last 12 months, and it processed over $1 billion in transactions last year. The company has hinted that it plans to eventually expand into lending, savings and investing.
Elsen
Elsen formally launched its big data platform for financial institutions earlier this year with the announcement that its technology would power Thomson Reuters' new investment modeling software tool. Founded by three Northeaster University graduates, the startup has raised $750,000 from Hyperplane Venture Capital and other investors. Its nPlatform service integrates data from sources like the London Stock Exchange and S&P Global to help hedge funds, banks and insurance companies gain important insights from large heaps of data.
FutureFuel
Founded by former Google executive Laurel Taylor, FutureFuel provides a platform that lets companies provide student loan payments as an employee benefit. The software-as-a-service platform lets employers contribute $200 to $1,500 a month to pay off an employee’s student debt. The startup recently won a Benzinga Fintech Award for the personal finance category.
Flywire
Flywire is an MIT-born startup that makes it easier and cheaper for people to send cross-border payments to universities, hospitals and businesses. Funded with $43.2 million in capital from investors like F-Prime Capital and Bain Capital Ventures, the Boston startup has processed over $5 billion in cross-border payments to date. For the 2017 fiscal year, the company expects to process roughly $3 billion. Across its three business, Flywire has 1,400 clients across 20 countries that accept payments using its system. It has integrations with WeChat, PayPal and AliPay.
Insurify
Insurify is an artificial intelligence-powered insurance comparison service that raised a $4.6 million funding round led by the corporate venture arms of MassMutual and Nationwide earlier this year. While the startup originally started as an insurance comparison site, it has since branched out to other products, including a text message service that lets you text a picture of a car’s license plate to get insurance quotes and a chatbot on Facebook Messenger. Founded and led by Snejina Zacharia, the startup has helped more than 1.5 million people search for insurance, and it has seen more than 40 percent month-over-month growth in the number of customers buying insurance policies.
Kensho
Kensho provides a machine learning-based investment analytics platform that is used by major banks, including Goldman Sachs, JPMorgan Chase and Bank of America Merrill Lynch. Earlier this year, those banks invested in Kensho’s $50 million Series B funding round that was led by S&P Global Inc. With the new funding deal, Kensho received access to S&P’s market data, which the company using machine learning to understand the relationship between financial data and events across the world. As of March, the startup had about 80 employees.
LevelUp
LevelUp, which provides a mobile payments and customer rewards platform, had been a little quiet for a while until it was revealed last December that the Boston startup has partnered with Chase Bank to power the “order ahead” feature of its Chase Pay app. Then, in May of this year, the startup announced it had raised a $50 million round led by JPMorgan Chase, CentroCredit Bank and wealth management firm US Boston. While the startup provides a standalone app, LevelUp has been focusing more of its energy on its white-label platform, which powers the apps of more than 200 brands.
Numerated
Numerated Growth Technologies is the first startup to spin out of Eastern Bank’s startup accelerator, Eastern Labs. The Boston startup’s mission is to provide banks with modern tools that can help it compete with online lending startups. In May, the company came out of stealth mode with a $9 million Series A round led by Venrock and Cultivation Capital FinTech. The startup claims its software can process bank loans in under five minutes, thanks to data science. The software also provides banks with marketing automation tools to reach customers and prospects. Numerated had four customers as of May, and nearly 100 banks had made inquiries about the software before the startup came out of stealth mode.
Quantopian
Quantopian provides a crowdsourced investment platform that gives anyone the chance to create and test new investment algorithms — the best-performing algorithms get added to Quantopian's fund while its creators win some cash. Last November, the startup raised a $25 million Series C round led by Andreessen Horowitz. More recently, the startup began managing a $250 million fund from hedge fund magnate Steve Cohen. There are now over 120,000 people creating trading algorithms on Quantopian’s platform.
Quilt
Founded by ex-Goji executives and venture capitalist at NextView Ventures, Quilt aims to make insurance easier to buy and use through an easy-to-use, mobile-optimized experience. The startup raised a $3.25 million seed round led by NextView last summer. The startup originally launched with rental insurance, and it recently expanded to life insurance, saying that it can cut the approval process for life insurance policies from months to 15 minutes. Quilt plans to eventually expand into other verticals.
RateGravity
Founded by two former community bankers, RateGravity aims to help homebuyers find lower-interest mortgages through its automated service. The startup, which was part of the 2017 Techstars Boston class, raised a $2 million seed round earlier this year by a number of Boston entrepreneurs and investors. As of May, it had matched over 150 people with $40 million in approved mortgages since last July. Because the service gets rid of the need for a salesman, RateGravity says customers can expect to save an average of nearly $30,000 over the life of their loans, compared to traditional lenders. In June, the company announced that former state banking commissioner David Cotney has joined its team as a regulatory advisor.
Toast
Founded by former Endeca executives, Toast provides restaurant point-of-sale and analytics software. Earlier this year, the company said it plans to expand to more than double its office footprint to 81,000 square feet in Hatch Fenway in Landmark Center. As of late April, the startup had nearly 500 employees, with plans to hire “several hundred” this year. In January 2016, the startup raised a $30 million Series B round led by Bessemer Venture Partners, with participation from GV (formerly Google Ventures). Toast won BostInno’s 2017 Tech Madness competition.
