Who will be the next big thing in our industry? A new London-based firm is aiming to find it.
Seismic Foundry, co-founded by Bill Templer, Brendan Bradley, Cathryn Lyall, Dave Feltes and Jeff Gale, is looking for the next fintech start-up that could become the next superstar in the financial industry. Of course, they are not alone and there are many firms from Chicago to New York to London and beyond that are looking to invest in those firms aiming to solve industry problems and disrupt inefficient sectors. But they are aiming at a slightly different market sector in the fintech space.
John Lothian News sat down with Cathy Lyall in London last month to talk about Seismic and find out what the landscape looks like out there. Interestingly, she said the environment features experienced professionals from the bank, brokerage and trading side of the world and very few students in dorm rooms looking to become the next Goldman Sachs. Many of those entrepreneurs have an in-depth knowledge of their product as well as of the industry. For them, a small seed investment and a partnership with Seismic’s formidable management team might be just what is needed. Seismic is looking to go further than just seed investment. They offer to help build the company via industry contacts, leads, management expertise, technical or legal and accounting services. No matter what the technology, success is still a combination of what you know and who you know.
The firm has also identified a key tax incentive program in the UK that it hopes will also help attract investment capital to this early start-up space. The so-called Start-up Enterprise Investment Schemes (SEIS) and Enterprise Investment Schemes (EIS) offer tax relief to investors in these budding companies. This could be an innovative way to deploy small amounts of capital that will pay off down the road.
Oddly, as much money as flowed into the fintech space, there are relatively few that are focused just on the securities and derivatives space. Fintech now means everything from automated teller technology to online payment and insurance tools. Finding that next firm that may truly improve the markets or processes is tough work. A recent visit by Seismic to a technology event with 150 firms produced a grand total of one firm that caught their attention.
“There’s nobody doing what we’re doing at that very early stage right now that has that pure capital markets lens that we’re focused on,” Lyall said.
But Seismic is not alone in the “The Financial Industry’s Got Talent” search. In Chicago, there are two organizations focused firmly on this space. FinTank, launched in April by George Vukotich, one of the key builders of Chicago’s 1871 incubator organization, is focused on helping start-ups with many of the same services as Seismic. FinTEx, meanwhile, just launched its re-branding last month to help expand the fintech ecosystem in Chicago through its network and community.
Seismic, FinTank and FinTEx are just a few examples of how this sector is evolving and growing. Every major exchange and many proprietary trading firms have their own venture capital groups, dedicated to finding new and innovative solution providers.
Seismic and others may truly be part of a massive shift in our markets. And now we can say we knew them when they were just getting started.
**Editor’s Note: If you have a firm or organization that is investing, developing, incubating or encouraging new fintech growth. Reach out to us. We’d like to hear your story and tell you what we’re working on as well. Contact Jim Kharouf at firstname.lastname@example.org.