A fast-growing financial technology firm in Cincinnati has received approval for a nearly $1 million job creation tax credit as it looks to double in size.
The Ohio Tax Credit Authority approved a more than 2%, eight-year tax credit for downtown-based Luma Financial. As part of the tax credit agreement, the company is required to maintain operations at the project location for at least 11 years. The estimated value of the state tax credit is $935,000.
Luma, which has offices in Cincinnati and New York City, plans to double its presence at its Cincinnati office. Tim Bonacci, president and CEO of Luma, expects the firm to add another 50 people in 2021. Driving the need for all those additional employees is the massive growth Luma has had in providing a technology platform for investment advisers to access and compare structured products and annuities.
Bonacci said in a news release the company’s growth “is a testament to our team’s persistent and effective efforts toward building an industry leading fintech platform.”
Luma makes it easier for investment advisers to access structured products and annuities. Structured products typically link an investment to a market index to provide downside protection and enhance returns. Among other things, Luma helps investment advisers offer the products to clients, compare the various products that are available and track investment results.
Luma now handles $20 billion a year in structured product volume, Bonacci said. That’s a whopping one-third of the entire market, and it’s 10-fold growth from the $2 billion a year it handled just two years ago. He also anticipates the volume the firm handles will jump to $30 billion next year.
The company is looking to hire technical and support staff, such as development engineers, business analysts and administrative positions to support its growth.
Kimm Lauterbach, president and CEO of REDI Cincinnati, said the Cincinnati region’s concentration of financial services companies and talent make the region a destination for companies like Luma.
According to a scope of work document from the Ohio Development Services Agency, Luma expects to create 58 jobs generating nearly $6.7 million in new annual payroll. That breaks down to an average of $115,000 per job. Luma also will retain more than $4.8 million existing payroll. The new jobs are expected to be in place by the end of 2023.
The city of Cincinnati is working with Luma on an incentive as well. Markiea Carter, interim director of Community and Economic Development for the city of Cincinnati, said the firm’s expansion is “a unique opportunity to grow the financial technology industry in Cincinnati.”
The project is contingent on the approval of local incentives.
The growth of employees means Luma is “out of space at the moment,” Bonacci said. Many employees are working remotely now, because of the coronavirus. But Luma needs a larger office. Its headquarters are in the U.S. Bank Tower at 425 Walnut St.
