This week saw the first of what I hope are many Boston FinTech Demo Days. Ten startups presented for about seven minutes each and then fielded questions from the audience. Large touch-screen monitors allowed presenters to show, and in many cases demonstrate, the workings of their products.
Stock trading was the big theme of the evening, followed by currency exchange. Many presenters focused on institutional business, rather than retail. Unlike at Finovate, there wasn’t a mobile payments startup or PFM offering in sight.
Here’s a rundown of the companies, in alphabetical order.
I hadn’t thought of Abine as a FinTech company until now. Backed by Atlas Ventures and General Catalyst, Abine offers both free and premium services that help people maintain control over their personal information online.
I had previously installed Abine’s free DoNotTrackMe browser add-on to block advertising cookies and it seems to work well. With this product, Abine looks like a direct competitor to Ghostery.
But, Abine also offers to mask your email address and manage your account logins for free as well. Using their MaskMe service is a little kludgy if you use Abine to mask and manage some, but not all, of your logins. Here, Abine is starting to look like Dashlane.
An upgrade to Premium allows you to mask your phone number and credit card information. Abine will store your actual credit card number securely and generate a new single-use card number for each purchase, with a credit limit equal to the amount you are charging. The online merchant never sees your real account number. With this, Abine is firmly in financial services, taking a piece of the interchange fee on each transaction.
Two questions I’d like to ask:
- What is Abine’s role in dispute resolution?
- Can I use Abine if I use BillGuard to monitor fraudulent charges?
I like what Abine is doing. They need to clarify their position in the market and also improve the user interface on MaskMe. They are in a very competitive space. Big companies like McAfee will be coming right at them.
Update from Abine: “Abine is now a “middle man” in dispute resolution. We encourage our users to first try to work with the merchant directly before filing chargebacks. More often than not an initial miss-understanding is uncovered, the merchant issues a refund or appeases the user in some other way, and the issue is resolved. If the merchant is un-cooperative and/or the user is correct in filing a chargeback, we then issue the chargeback ourselves providing the same details from the user’s side, and provide the user a refund.”
“Unfortunately, BillGuard and Masked Cards wouldn’t work well together.”
Bison is trying to bring a little more transparency to private equity and venture capital by collecting relevant news coverage, fund performance data, fundraising facts and other information on more than 1,700 private equity and venture capital funds. It’s like a BrightScope for PE/VC firms.
Their market is clearly limited partners. Entrepreneurs will like Bison. It’s a nice complement to the gossip on The Funded. General partners (particularly those with poor performance) will probably not like Bison but might sign up anyway to monitor their own profiles. But they have other sources of competitive intelligence available to them.
I see no signs of the original Bison intention of becoming a marketplace for matching LPs and GPs. Private placement agents can breathe easier. Perhaps that’s coming later.
My questions about Bison revolve around data freshness and data accuracy. Looking at the listings of a few firms I know well, the data offered is often incomplete and sometimes inaccurate. And that’s not going to cut it.
For GPs and LPs, and maybe journalists, the price of a subscription will be easy to digest. Right now it’s free, so go sign up and see for yourself.
Boston Technologies (http://www.bostontechnologies.com/)
Boston Technologies is the farthest along of all the evening’s presenters, admirably bootstrapped since 2007. (Capital they’ve raised so far has all been debt.) The firm offers technology to retail and institutional brokerage firms trading foreign exchange. They do not serve the corporate market at this time.
They are experiencing strong growth in Asia, and have offices in Boston, London, Shanghai and Tokyo. The platform is accessible in multiple languages. While foreign exchange brokerages see a great deal of churn among their retail customers (F/X trading is a zero-sum game), Boston Technologies does not experience much churn among their brokerage company clients.
As the name implies, BuysideFX simplifies and automates foreign exchange trading for institutional money managers. It features a very nice U/X.
BuysideFX is backed by Atlas Ventures and was a 2012 Gold winner at MassChallenge. Co-founder Shereen Shermak left mid-year to become CEO of Launch Angels.
Capital Markets Exchange (http://www.capital-market-exchange.com/)
Few startups attempt to address the needs of the $90 trillion dollar global fixed income marketplace. Capital Market Exchange works with institutional fixed income teams to identify opportunities in investment-grade credits by turning investor sentiment into actionable inputs for investment decisions. Capital Market Exchange was a Silver MassChallenge winner in 2012.
Kensho Finance (http://www.kensho.com)
FinTech meets big data meets cloud.
Kenhso is a quantitative research tool for institutional equity investors. It facilitates analysis of event data and their effect on asset prices, and allows for easy back-testing of investment theories. They are bringing computing power that was previously available only to a handful of big hedge funds to every analyst and mutual fund manager on the block. The interface looked easy to master and graphical results were attractively rendered. You can see how some stocks move in predictable seasonal patterns here: www.SeasonalOdds.com.
Kensho raised $6.1MM in debt from four investors last month.
Quantopian wants to give every python programmer and STEM graduate the browser-based tools needed to become an algorithmic trader, including powerful back- and forward-testing capabilities. Users can write their own personal trading algorithms or copy the algorithms that have been made public by other members of the site. They can also ask questions and get feedback from more experienced traders in the Quantopian community.
The site requires users to have some sophistication when it comes to technology and investing. The tools are free. If you decide to trade on your algorithms, Quantopian intends to charge a flat monthly fee. (I believe this will be on top of your trading costs.)
The folks at Quantopian know they are targeting a niche market. Their marketing is going to have to be smart and sophisticated to drive cost-effective client acquisition. A key question for their retail strategy will be whether or not the average quant off the street makes long-term money. I have my doubts. Regardless, they appear to be building something interesting and of value.
Quantopian has raised nearly $11MM from Spark, Khosla, and others, closing its most recent round in October.
Samurai Investments ( http://samurai-investments.com)
Samurai is a very young company offering cloud-based analytical tools to less sophisticated investors. As such, they are putting a great deal of effort into investor education. Like Quantopian, Samurai offers free and powerful back-testing capabilities, but unlike Quantopian, it does not require programming skills to use. It is easy to envision a scenario under which Samurai customers with technical skills migrate to Quantopian as their investment sophistication grows. But, this will happen only if their trading is successful and their account balances grow, too.
TripleShot is a new trading venue for the institutional buyside. It is specifically not designed for high-frequency traders. The value proposition is simple – fast and effective trading executions without having to show your hand on trades in advance. Large blocks of stock can cross quietly off the exchanges without moving prices, and out of the view of predatory market participants. All trades take place at the midpoint between the bid and ask.
My guess is that success will require significant and rapid acceptance of the platform. Only by reaching a critical mass of buyside traders can TripleShot guarantee fast execution. They have to offer liquidity to traders with large positions, and they likely have to offer it the very first time a trader uses the platform.
TrippleShot has raised an undisclosed amount of capital from angel investors and Atlas Ventures.
Founded in 1999, Varden’s software helps asset management firms communicate with their clients through reports, presentations, and portals.