Canada’s First FinTech Lab with an Associated AI Lab to Begin Inaugural Cohort This Fall
Innovation is difficult. Especially in the field of financial technology.
In digital age, regulations surrounding Fintech are vast and complex. When combined with the globalization of many financial institutions, it is increasingly challenging for many of the larger FIs to think outside the box and find new and better ways to deliver services. That’s at least part of the reason why the Holt accelerator for FinTech startups has been created in Montreal. To guide FinTechs through their journey to launch and help them pair up with financial institutions who could use their technology to enhance their own value proposition.
“It’s the last piece of the puzzle, and a very important part of the city’s FinTech ecosystem” says Jan Christopher Arp, co-Managing partner at the Holt accelerator. “If you’re a FinTech, at some point you’re going to need to collaborate with a financial institution, and work with them directly to deliver your services. Right now we’re seeing collaboration increase between FinTechs and FIs”.
Arp believes this increased collaboration is only the beginning and points to Europe as an example of what he says the future may hold for Fintech in this country. A larger and ever-increasing number of deals in Europe’s financial sector, as well as a trend where competing FIs suddenly find themselves collaborating has him thinking we’re on the right track here. “We may be 2 or 3 years behind the Europeans at this stage, and our intention is to start catching up”.
Another player in Montreal’s innovation ecosystem who knows a thing or two about collaboration is Ilias Benjelloun, Creative Director for Montreal NewTech and Open Innovation Catalyst at Desjardins Lab. “This accelerator will increase competition for the great ideas, teams and execution. For startups, this may mean better terms, better opportunities, and better playgrounds to test and launch their products. This should lead to an increase in the growth and maturity of our ecosystem”. He later added “some stakeholders in our ecosystem have been struggling to find the right playgrounds and corporate partners. The Holt support will help entrepreneurs gain access to their vast network of industry contacts and increase competition on who gets access to the startup’s product first”.
In fact, this style of accelerator program does not exist elsewhere in Canada. Holt is the first FinTech accelerator in Canada with an associated AI lab. “Anything FinTech will have an AI element to it at some point” according to Arp. Which is why the program has developed a partnership with Stradigi AI, giving Holt’s portfolio companies access to AI talent at a significant discount. A huge advantage not available elsewhere. “We’ve also partnered with Valtech for support on UX design, and we have mentor days to help keep our talent on track as well”. This is of course on top of the usual legal, financial and accounting services you typically see associated with an accelerator program.
To find their portfolio companies, founder and Managing Partner for the program, Brendan Holt Dunn, along with Arp, will together sift through hundreds of applicants, get on phone with them and start validating their technology. The top 30 or 40 will be invited to a selection day to meet with partners, advisors and representatives from financial institutions. Those stakeholders will then fill out a survey on each of the FinTech applicants they have met with, explaining what they liked and what they didn’t, along with risks and opportunities for each. This will provide Holt Dunn & Arp with a sense of which ideas are more likely to be of interest to financial institutions, and also indicates which entrepreneurs may be more coachable than others.
The top 10 will be invited to participate in the accelerator program which begins this fall. The accelerator will be located in downtown Montreal near the intersection of Peel & de Maisonneuve. Applications are now being accepted.
Phil Barrar, CEO of Mylo Financial Technologies, a rapidly growing Montreal FinTech, says access to the tools a program like this provides to startups is vital for their growth and long-term prosperity. “Mylo would never have come as far as it has if I hadn’t had the support of a FinTech accelerator program. I don’t think I would have been able to start this business on my own”. Barrar, who’s business was incubated by Ferst Capital Partners, also points out that FinTech is far more complex than many other verticals that entrepreneurs may find themselves in. “There is so much regulation and security compliance you have to figure out. That’s why these expert advisors are so important, they really help put you on the right track and save the business so much time”.
As for the name, Holt, it comes from Sir Herbert Holt, great, great grandfather of Brendan Holt Dunn. Sir Herbert built a utility here in Montreal that is known today as Hydro Quebec. He later served as Chairman of RBC in the early 1900’s. Since then the family has gone on to conduct business all over the world, but they never forgot that Montreal is home, and wanted to give back to the community locally. However, this investment is not being made just for sentimental reasons. Their website lists several compelling reasons to invest in La Metropole. Montreal’s world leading pool of AI and deep learning talent is widely known. However not everyone knows that Montreal is ranked as the #12 hub for financial services globally, yet still has a very low cost of doing business and cost of living. Best of all, there is a significant amount of investments dollars in this province just waiting to be deployed in the FinTech vertical.
“I think we have somewhere near half a billion dollars of funds available in Quebec for FinTech investment. Who are we going to invest in is the big question” says Arp, adding “There is all this capital lined up from a wide mixture of sources, and you’re finally starting to see an appetite for collaboration from the corporate side. Now when you add those two pieces together it begins to make a lot of sense”.
With the investors in place and demand for the product increasing the opportunity is clear for the Holt accelerator. The program itself is an intensive 12-week sprint, which can be tweaked depending on the needs of a given portfolio company or financial institution who partners with then. 10 companies will be accepted into each cohort, of which there will be one each year starting in September 2018.